Ajman Bank P.J.S.C., the first Islamic Bank incorporated and headquartered in the Emirate of Ajman, has successfully priced a $500 million 5-year sukuk at a credit spread of 130 basis points over the United States Treasury rate, resulting in a fixed profit rate of 5.125 percent per annum.
The transaction attracted a high-quality order book that peaked at over $2.7 billion, representing a remarkable 5.4x oversubscription rate, with participation from more than 100 investors. This marks Ajman Bank’s inaugural sukuk issuance, a major milestone in the bank’s capital markets journey and an opportunity to diversify its funding platform.
Given that this transaction marks Ajman Bank’s debut in the international capital markets, the bank undertook an extensive marketing effort by meeting with investors in Hong Kong, Singapore, Malaysia, London, and the UAE. During these meetings, the bank communicated its new and revamped business strategy aimed at enhancing financial performance and positioning the bank for future growth in the UAE’s dynamic economy.
The issuance attracted demand from some of the largest international and regional institutional investors, achieving extensive geographic diversification with 35 percent allocated to international investors and 65 percent to regional investors.
Confidence in bank’s growth strategy
Mustafa Al Khalfawi, Ajman Bank’s chief executive officer, said, “We are pleased with the success of our inaugural sukuk issuance and the strong response from investors which highlights the confidence placed by international and regional investors in Ajman Bank, the growing prominence of the Emirate of Ajman and the robustness of the broader UAE economy. Investors welcomed Ajman Bank’s ambitious growth strategy, its firm commitment to enhancing asset quality, and appreciated the opportunity to engage with a new name in the market. Additionally, they expressed their comfort and positive views on the UAE’s operating environment and robust economy.”
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Seizing opportunities amid market uncertainty
Ajman Bank took a bold initiative by opportunistically accessing the market despite prevailing uncertainties stemming from recent trade tariffs imposed by the United States. The bank announced its intention to issue a debut sukuk on Tuesday morning and conducted calls throughout the day with European, Asian, and U.S. fund managers. Following positive investor feedback, the team decided to accelerate execution and close the transaction on Wednesday.
Effective pricing strategy reflects investor confidence
Initial Price Thoughts (IPTs) of U.S. Treasuries plus 165 basis points were released to the market on Wednesday morning, with final pricing set at U.S. Treasuries plus 130 basis points by London noon. Moreover, the 35 basis points price tightening, achieved in a single iteration, reflects the high quality of the order book, which comprised some of the world’s largest fund managers, banks, pension funds, and insurance companies.
Ratings and listing of the sukuk
Ajman Bank is rated BBB+ by Fitch with a stable outlook. The sukuk will also be rated BBB+ by Fitch and will be listed on the London Stock Exchange’s International Securities Markets and Nasdaq Dubai. The Joint Global Coordinators for the transaction were Standard Chartered Bank, Emirates NBD Capital, and First Abu Dhabi Bank, with J.P. Morgan serving as Joint Lead Managers and Bookrunners alongside Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Bank ABC, Citi, Dubai Islamic Bank, KFH Capital, Mashreq, QNB Capital, Sharjah Islamic Bank, The Islamic Corporation for the Development of the Private Sector, and Warba Bank.
