Ajman Bank, the first Islamic bank founded and based in Ajman, has successfully completed the pricing of a $500 million, five-year Sukuk, with a credit spread set at 130 basis points above the U.S. Treasury rate. This results in a fixed profit rate of 5.125% annually. The issuance attracted significant interest, reaching an impressive orderbook peak of over $2.7 billion, demonstrating a 5.4 times oversubscription with involvement from more than 100 investors. This event marks Ajman Bank’s inaugural Sukuk issuance, serving as a crucial step in its capital markets journey and enabling further diversification of its funding sources.
As this issuance is the bank’s first venture into the international capital markets, an extensive marketing campaign was carried out, including meetings with investors in key cities such as Hong Kong, Singapore, Malaysia, London, and the UAE. During these discussions, the bank outlined its refreshed business strategy aimed at enhancing its financial performance and positioning the institution for future expansion within the dynamic UAE economy.
The offering attracted interest from major international and regional institutional investors, resulting in a geographical diversification of 35% for international investors and 65% for regional investors.
Mustafa Al Khalfawi, the Chief Executive Officer of Ajman Bank, expressed satisfaction with the success of the bank’s first Sukuk, highlighting the strong investor response that underscores the confidence placed in Ajman Bank and the UAE’s economic environment. Investors were especially supportive of the bank’s ambitious growth plans and commitment to improving asset quality, appreciating the chance to connect with a new entity in the market.
In a strategic move, Ajman Bank chose to tap into capital markets despite uncertainty caused by recent U.S. trade tariffs. Following the announcement of the Sukuk issuance on Tuesday morning, the bank engaged in discussions with fund managers across Europe, Asia, and the U.S. Positive feedback prompted the team to expedite the execution, successfully closing the transaction by Wednesday.
Initial Price Thoughts (IPTs) indicated a spread over U.S. Treasuries of 165 basis points, which was subsequently adjusted to 130 basis points by noon in London. This 35 basis points reduction illustrates the strength of the orderbook, which included significant participation from top global fund managers, banks, pension funds, and insurance companies.
Ajman Bank holds a BBB+ rating from Fitch with a Stable outlook, and the Sukuk itself also received a BBB+ rating from Fitch. The securities will be listed on the London Stock Exchange’s International Securities Markets and Nasdaq Dubai. The joint global coordinators for this 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 several other financial institutions.