Warba Bank announced a $750 million Sukuk for EQUATE Petrochemical Company with regional and global success, as the bank was appointed as a joint lead manager, joint bookrunner and subscription agent in Kuwait for this issuance, along with Citi Group, First Abu Dhabi Bank, JPMorgan, Mizuho and MUFG as global coordinators for this issuance, and KFH Capital and SMBC Capital Markets limited as lead managers and joint bookrunners, in addition to co-managers, including Bank ABC, Bank Ltd. DBS, Intesa Sanpaolo IMI-, and Standard Chartered.
The issuance, which began to register subscription requests on Thursday, August 29, 2024, and closed on the same day, received great interest from regional and international market participants, with the volume of requests reaching two billion dollars, more than two and a half times the size of the issuance.
The bank said in a press release that this issuance is the second tranche of EQUATE Petrochemical Company’s dollar-denominated Sukuk program, which has a total value of $2 billion, as $750 million was issued with a maturity of 7 years. The Sukuk was offered at a price of 98.99%, reflecting an effective return rate of 5.17%, with a nominal annual return rate of 5%, and an official maturity rate of 100%. It is worth noting that these Sukuk were listed on the Euronext Dublin exchange platform.
The bank pointed out that the acquisition of 37% of the total issuance by fund managers, indicates the significant interest of this segment of investors in these high-quality Sharia-compliant assets, explaining that the segment of investors from companies, central banks/official institutions, insurance companies and pension funds, collectively acquired 7% of the total issuance, indicating the strategic interest in these sukuks for the purposes of managing the general budget and diversification.
In terms of geographical distribution, the Middle East and North Africa region was the largest contributor, as it obtained 68% of the total issuance, followed by the United Kingdom, then Europe, Asia, and the United States.
Wide Participation
In this context, the Head of the Investment Banking Group at Warba Bank, Thuwaini Khalid Al-Thuwaini, said: “We succeeded in closing the offering of these sukuks with wide participation and great interaction from the markets, which is evidence of the correctness of the bank’s strategic aspirations and effective contributions, and its remarkable success in completing this issuance, which not only reflects the strength of the issuance, but is also the best evidence of the extent of the confidence and enthusiasm of the markets for sukuks and the confidence of investors in Warba Bank.”
Al-Thuwaini praised the importance of Islamic financing tools and their role in strengthening global financial markets, which is confirmed by the interest of investors from all over the world in subscribing to Sukuk deals issued by regional companies and banks recently.
He stated that Warba Bank's approach revolves around the continuity of its position as a major player in the financial markets for many years to come, and focusing on the bank's growth and expansion, as Warba Bank's management aspires to deliver the bank's services to institutional and individual investors, while ensuring adherence to professional banking ethics and continuous innovation in Warba Bank's strategy.