Qatar’s second-largest Islamic bank Masraf Al Rayan (MAR) revealed that it’s $750mn Sukuk issuance generated overwhelming demand from global investors and was oversubscribed 4.4 times.
MAR bank, rated ‘A1’ by Moody’s with a stable outlook issued $750mn Sukuk with a term of five years under the bank’s existing $2 billion Sukuk program. The Sukuk issuance was oversubscribed 4.4 times to the tune of nearly $3.3 billion.
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 percent per annum.
MAR’s Sukuk issuance has attracted investors from across the globe with 41 percent representations coming from Europe, 28 percent from Asia, 24 percent from MENA and 7 percent from US offshore accounts.
Investor Breakdown
69 percent of the issue was made to fund managers with a 15 percent issue being made to banks and private banks. Agencies took up 8 percent to agencies with another 8 percent allocated 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 MAR and the strength of the Qatari economy to 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 bookrunners on this transaction.
