First Abu Dhabi Bank says that its first Sukuk in 2023 - a $500 million issue - had a pricing with 'zero new issue premium for a new 5-year Sukuk'. Image Credit: Clint Egbert/Gulf News

Dubai: Abu Dhabi mega-bank FAB has become the first to issue a dollar-denominated Sukuk in 2023, coming up with a $500 million five-year offering. The Sukuk was priced 90 basis points over the US Treasury Rate, and equivalent to a profit rate of 4.581 per cent. It is listed on the London Stock Exchange.

“While this issuance is catered predominantly to our Islamic investors, it also refreshes our pricing benchmark for our private placements and issuances in other markets,” said Rula AlQadi, Group Treasurer at FAB. “I would like to thank our investors and partners for the trust placed in FAB which helped us price inside our conventional curve – a fantastic result especially after a very tumultuous 2022 for fixed-income.

“Our wholesale funding will be driven by the diversity of investor base and cost-efficient markets - and the Sukuk market is especially important for us in this regard.”

FAB acted as joint lead manager on this Sukuk issuance.

Based on FAB’s funding curve, the Sukuk pricing is around 10 bps inside the fair value for a new 5-year bond and at zero new issue premium for a new 5-year Sukuk. “This is an exceptional result given the market volatility witnessed in 2022 and possible only due to the bank’s sound credit profile and standing with international investors,” FAB said in the statement.