Dukhan Bank, rated A2 (stable) by Moody’s and A (negative) by Fitch, has priced its $500 million AT1 sukuk at sharply tighter levels than initial price thoughts, with the deal finalised at a 6% semi-annual coupon and yield, tightening from the 6.5% area.

The transaction was nearly 3x oversubscribed at $1.4 billion (excluding joint lead managers).

The transaction was arranged by a large syndicate of regional and international banks, including Abu Dhabi Commercial Bank, Emirates NBD Capital, HSBC, Mashreq, Standard Chartered, QNB Capital, Qatar Islamic Bank, Qatar International Islamic Bank, The First Investor and Warba Bank.

The pricing was calculated based on an average of two US Treasury bonds – one maturing in May 2031 yielding about 4.22%, and another maturing in May 2033 yielding about 4.32% – with an added margin of 175.4 basis points.

The Reg S perpetual non-call 5.5 sukuk, issued using a Mudaraba structure, will be listed on the London Stock Exchange.

(Writing by Ahmad Mousa; editing by Seban Scaria)
Ahmad.mousa@lseg.com