Masraf Al Rayan has witnessed more than four times oversubscription of its $750mn five-year sukuk, indicating international investors' confidence in it, as well as in Doha's strong macroeconomic framework.
The issued instrument, which came under its existing $2bn sukuk programme, saw subscription to the tune of $3.3bn, Masraf Al Rayan, which is rated ‘A1’ by Moody’s, said in a regulatory filing with the Qatar Stock Exchange.
The overwhelming demand from investors has allowed the bank to increase the issue size from an initial $500mn to $750mn.
The issuance was priced at a spread of 185 basis points over the five-year mid swap carrying a fixed profit rate of 2.21% per annum.
The sukuk issuance has attracted investors from across the globe with 41% from Europe, 28% from Asia, 24% from Middle East and North Africa and 7% from the US offshore accounts.
By investor type, 69% were allocated to fund managers, 15% to banks and private banks, 8% to agencies and 8% to insurance and pension funds.
The success of the issuance was based on a comprehensive marketing strategy that aimed to demonstrate the strong fundamentals of Masraf Al Rayan and the strength of the Qatari economy to the international investors.
Al Rayan Investment, Crédit Agricole CIB, HSBC, Mizuho, MUFG, QNB Capital, Société Générale and Standard Chartered Bank acted as joint lead managers and book-runners on this transaction.
The Islamic bank and Al Khaliji are right now contemplating a merger and acquisition route to create the third largest Islamic lender in the country.
The potential merger would lead to the creation of one of the largest Shariah-compliant banks in Qatar and in the Middle East with total assets exceeding QR164bn and shareholders’ equity of more than QR19bn.