Ras Al Khaimah Government Successfully Issues USD 1 Billion Sukuk With Strong Investor Demand

The Government of Ras Al Khaimah, through its Investment and Development Office, has successfully issued a 10-year US$1 billion senior unsecured sukuk. This offering, completed on 5th March 2025, carries a profit rate of 5.038%. This marks the government's return to the international debt capital market after a decade.

The sukuk issuance was part of Ras Al Khaimah's US$2 billion Trust Certificate Issuance Programme, established on 28th February 2025. RAK Capital, a special purpose vehicle linked to the government, managed the issuance. The sukuk aligns with recent Shari’a guidelines set by the UAE Central Bank Higher Shari’a Authority.

On 3rd March 2025, the government announced the sukuk issuance and conducted virtual roadshows targeting investors globally. These efforts reached audiences in Asia, the GCC, Europe, and the UK. The strong investor interest resulted in an orderbook exceeding US$4.4 billion.

The transaction was initially guided at a pricing of 10-year US Treasury plus 120 bps. Due to high demand, final pricing was compressed by 40 bps to US Treasury plus 80 bps. The sukuk was listed on Nasdaq Dubai on 5th March 2025.

Investors from various regions subscribed to the sukuk: 57.8% from MENA, 35% from the UK/continental Europe, and 7.2% from Asia/Others. Citi and Emirates NBD Capital served as Structuring Advisors for this transaction.

Abu Dhabi Commercial Bank, Citi, Emirates NBD Capital, First Abu Dhabi Bank, RAKBANK, and Standard Chartered Bank acted as Joint Global Coordinators for the issuance process.

Credit Ratings and Investor Confidence

S&P Global Ratings affirmed an ‘A’ rating while Fitch confirmed an ‘A+’ rating for RAK Capital’s sukuk programme. These ratings align with those given to Ras Al Khaimah's government itself.

An official spokesperson stated: "The Government of Ras Al Khaimah is delighted with the overwhelming response that we have received from investors globally. The strong investor demand demonstrates confidence in Ras Al Khaimah’s creditworthiness, fiscal management and economic fundamentals."

This successful issuance highlights Ras Al Khaimah's robust financial standing and growth trajectory. The high oversubscription level reflects international confidence in its economic stability and governance.

With inputs from WAM