First Abu Dhabi Bank plans to raise $750m in sukuk

First Abu Dhabi Bank (FAB), the largest lender in the United Arab Emirates, is expected to raise $750 million in Islamic bonds, according to a document issued by one of the banks leading the deal.

The five-year sukuk offer buyers 130 basis points over mid-swaps, 20 basis points below the indicative price FAB proposed when it started marketing the notes earlier on Tuesday.

FAB, rated Aa3 by Moody’s and AA-(minus) by S&P and Fitch, is the first issuer in the Gulf to tap the international sukuk market this year.

S&P’s global head of Islamic finance, Mohamed Damak, said that sukuk issuance out of the Gulf is expected to increase this year if Brent oil prices fall below S&P’s forecast of $55 a barrel over a sustained period.

Brent crude oil futures were at $59.65 a barrel at 1233 GMT on Tuesday.

FAB’s debt sale, which will be finalised later on Tuesday, has attracted more than $2.4bn in orders, the document said.

Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, KFH Capital, NCB Capital Company, Sharjah Islamic Bank and Standard Chartered Bank have been mandated to arrange the issuance.