Sharjah Islamic Bank (SIB) has raised $500 million through a five-year Sukuk, attracting orders worth $1.3 billion as investors showed strong demand for the Islamic bond, the United Arab Emirates-based lender said.
The order book was 2.6 times the size of the offering, allowing the bank to price the Sukuk at a final yield of 5.85%, equivalent to a spread of 105 basis points over five-year U.S. Treasury securities.
The transaction marks SIB’s 13th Sukuk issuance since it entered international capital markets in 2006, underscoring the bank’s continued use of debt markets as part of its funding strategy.
SIB said the issuance would support its financing plans, diversify its sources of liquidity and provide greater flexibility in managing its funding requirements.
“The successful issuance reflects investor confidence in the bank’s financial performance and long-term strategy,” Mohamed Abdalla, CEO of Sharjah Islamic Bank, said in a statement.
He said capital market activity remained a key component of SIB’s funding strategy and would support the lender’s plans for sustainable growth.
We continue to build on SIB’s presence in international capital markets, supported by solid financial fundamentals and a disciplined approach to balance sheet and liquidity management.
The strong order book also highlights continued investor participation in the international Sukuk market, where issuers have increasingly tapped demand from Islamic and conventional fixed-income investors seeking dollar-denominated assets.
Ahmed Saad, deputy CEO of Sharjah Islamic Bank, said the $1.3 billion order book demonstrated investor confidence in the bank and its ability to execute transactions in international capital markets.
The transaction also strengthens SIB’s ability to manage its funding needs while broadening its liquidity sources, he said.
Sukuk are structured to comply with Islamic finance principles, which generally prohibit the payment or receipt of interest.
Instead, returns are linked to underlying assets, transactions or investments, depending on the structure of the issuance.
For SIB, the latest transaction extends a nearly two-decade presence in the international Sukuk market.
The bank’s first capital markets activity dates back to 2006, and it has since returned to the market across different financial and interest-rate environments.
The latest five-year issuance comes as banks in the Gulf continue to use international debt markets to diversify funding sources and manage liquidity, while investor demand for high-quality issuers remains an important factor in pricing new transactions.
SIB did not provide further details on the allocation of the Sukuk or the geographic distribution of investors in its statement.