Abu Dhabi's ESIC raises $600m through debut sukuk

Rated Baa3 by Moody’s Investors Service, the company is fully owned by Sheikh Mansour bin Zayed

Emirates Strategic Investments Company, owned by Sheikh Mansour Bin Zayed Al Nahyan, successfully priced a debut $600 million sukuk. Esic.

Emirates Strategic Investment Company, an Abu Dhabi firm with investment interests in the financial, aviation and property sectors, has raised $600 million (Dh2.2bn) from its debut sukuk offering.

The five-year Sharia-compliant offering was priced on Tuesday with a 3.939 per cent profit rate, which was 35 basis points tighter than initial estimates, the company said on Wednesday.

Rated Baa3 by Moody’s Investors Service, with a stable outlook, ESIC has issued the senior unsecured Islamic bonds under its recently established $1bn sukuk programme, which is listed on the London Stock Exchange, it said.

The company, fully owned by Sheikh Mansour bin Zayed, Deputy Prime Minister and Minister of Presidential Affairs, has a multi-sector investment portfolio that includes interests in local and international firms, its website says.

Private and government-related GCC entities and financial institutions have increasingly tapped into the debt market to shore up capital amid a low interest-rate environment.

Dubai Islamic Bank (DIB) and First Abu Dhabi Bank (FAB), and Dubai's MAF, are among entities that have already sold sukuk this year.

The US Federal Reserve is meeting this month and is expected to cut interest rates, which will further encourage borrowing.

Investor demand for ESIC's sukuk was strong, with orders for the deal climbing to $3.7bn, an over-subscription rate of 6.2 times, the company said.

It said that 61 per cent of the sukuk was allocated to international investors – 33 per cent to Asia, 24 per cent to Europe, 4 per cent to the US – and the rest to GCC investors.

“The sukuk promotes the development of capital markets and Islamic finance in the UAE, as well as setting an international benchmark for other UAE private companies to follow,” said Khalid Al Suwaidi, chief executive of ESIC.

“We are very pleased with the outcome of the sukuk and the international investor demand that we received, which reflects the UAE’s strong standing in the international community.”

FAB and Standard Chartered Bank acted as joint global co-ordinators on the deal.

Bank ABC, DIB, Emirates NBD Capital, National Bank of Bahrain, and Warba Bank were among the joint lead managers.

Allen and Overy was legal counsel for the banks and Simmons and Simmons acted for ESIC.