Herbert Smith has advised Qatar Islamic Bank S.A.Q. (QIB) on its first dollar denominated sukuk issuance and the first sukuk to be issued in Qatar in 2010.
The US$750 million deal from the Gulf state’s largest Shariah-compliant lender was sold to investors in the Middle East, Asia and Europe. The sukuk priced at par and carried a coupon of 3.856% – corresponding to a spread of 237.5bp over midswaps. The good pricing reflects improved market sentiment for Islamic bonds following some successful debt restructurings in the region and the area’s strong economic fundamentals and natural resources.
QIB has a 50% share of Qatar’s Islamic banking sector and the Qatar Investment Authority is the bank’s largest shareholder.
The Herbert Smith team was led by Abu Dhabi-based senior associate Ursula Gil, assisted by Louise Flanagan and Anna Ralston
Ursula commented:
“The success of this benchmark issuance for QIB shows confidence returning to the Middle East capital markets following a difficult period and also underlines the demand for sukuk in the market. This is a significant milestone for Qatar given that the country’s first corporate sukuk was sold only three years ago. It also signals good news for FIG’s as QIB’s issuance is the first GCC financial institution to secure a sub-4% coupon since before the credit crunch. ”
Credit Suisse, HSBC and QInvest acted as joint lead managers and joint bookrunners with National Bank of Abu Dhabi as co-manager. Deutsche Trustee Company Limited acted as Delegate.
Mohammed Al-Marri in association with Al Tamimi & Company advised QIB on Qatari law. Allen & Overy advised the lead managers and the delegate on English law. Hassan Al Khater Law Office advised the lead managers on Qatari law.
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