Bank Of Sharjah Spearheads $300 Million Sukuk Issuance For Kuwait International Bank

In a significant move within the financial sector, Bank of Sharjah recently took on a pivotal role as a Joint Lead Manager and Bookrunner for Kuwait International Bank's (KIB) US$300 million Additional Tier 1 (AT1) 5.5 years sukuk. This collaboration included other notable international and regional banks. This transaction is particularly noteworthy as it marks the first US dollar AT1 issuance from Kuwait since 2021, showcasing KIB's active engagement in the US dollar capital markets following its inaugural AT1 sukuk in 2019 and a Tier 2 sukuk in 2020.

The issuance attracted considerable attention, with order books reaching an oversubscription rate of 2.2x, highlighting strong demand from both international and regional investors. This robust interest is a clear indicator of KIB's strong market presence. The successful pricing of the issuance at 6.625 percent per annum, which is a significant tightening from the Initial Price Thoughts (IPTs) of 7.000 percent, underscores the confidence investors have in KIB.

Mohamed Khadiri, CEO of Bank of Sharjah, expressed his satisfaction with the bank's central involvement in the sukuk issuance, stating, "We are extremely pleased to have played a central role in this sukuk issuance for Kuwait International Bank. Our contribution is a testament to Bank of Sharjah's strategic commitment to deliver innovative debt solutions that cater to our clients' funding needs in the region." Khadiri highlighted the transaction's success as evidence of KIB's effective access to the sukuk markets and the enduring trust placed in the bank by international and regional investors.

The issuance concluded with an exceptional spread of 195 basis points above US Treasuries. This achievement sets a new benchmark for the tightest spread achieved for an AT1 issuance in the Central, Eastern Europe, Middle East and Africa (CEEMEA) region and positions it among the most competitive globally for AT1 issuances.

Khadiri further commented on the broader implications of this transaction for Bank of Sharjah, stating, "This transaction adds to Bank of Sharjah’s impressive track record of providing financing services and advisory to corporate customers and financial institutions locally and across the region." He reaffirmed the bank's commitment to pursuing strategic objectives aimed at strengthening its position as a premier banking institution in the Emirate of Sharjah and the UAE while offering bespoke financing solutions to its customers.

This transaction not only underscores Bank of Sharjah's expertise in leading Debt Capital Market transactions beyond its home market but also reflects the growing sophistication and appeal of Islamic financial instruments among global investors. The successful execution of this AT1 sukuk issuance by KIB, with Bank of Sharjah playing a crucial role, demonstrates the dynamic nature of the Middle Eastern financial markets and their ability to attract substantial international investment.

With inputs from WAM