Prime Highlights-
- Arab Energy Fund prices $500 million five-year sukuk at 4.686% profit rate as investor orders exceed $900 million
- Strong demand pushes pricing to the tight end of guidance, with spread tightening from 80 to 70 basis points over SOFR
Key Facts-
- Sukuk carries expected ratings of Aa2 from Moody’s and AA+ from Fitch
- Certificates will list on Euronext Dublin and Nasdaq Dubai, settling through Euroclear and Clearstream
Background-
The Arab Energy Fund has priced a $500 million five-year sukuk at a profit rate of 4.686%, drawing orders that crossed $900 million and briefly topped $1 billion at peak.
Strong demand allowed the fund to tighten pricing from an initial guidance of 80 basis points over SOFR down to 70 basis points, landing at the tight end of its range. The re-offer yield came in at 4.267%, with final pricing sitting 41.9 basis points above the US Treasury’s 4.125% May 2031 benchmark.
The Reg S trust certificates were priced at par under a five-year tenure and will be listed on both Euronext Dublin and Nasdaq Dubai, with settlement running through Euroclear and Clearstream.
The sukuk was issued through APICORP Sukuk Limited under APICORP’s trust certificate issuance programme, using a wakala-murabaha structure. Moody’s has assigned it an expected rating of Aa2, while Fitch rates it AA+, consistent with the fund’s high-grade credit standing.
Proceeds will go toward general corporate purposes. Eight institutions acted as joint lead managers and bookrunners on the deal: Bank ABC, BMO Capital Markets, Citi, Credit Agricole CIB, Emirates NBD Capital, KFH Capital, Standard Chartered, and the Islamic Corporation for the Development of the Private Sector.
The book, which included around $80 million from joint lead managers, gave the Arab Energy Fund enough room to print at its tightest acceptable level, reflecting solid appetite from regional and international fixed income investors for high-rated Islamic debt instruments.
