Mashreq raised $500m
Oversubscribed six times
Bank re-enters debt markets
Mashreq, the UAE’s fifth-largest bank by assets, said its first sukuk issued since US reciprocal tariffs were announced was oversubscribed six times.
The Dubai-listed bank raised $500 million through a five-year sukuk at a profit rate of 5.03 percent per annum.
The sukuk, rated “A” by global rating agency S&P, will be listed on Euronext Dublin.
Sukuk are sharia-compliant bonds that were developed as an alternative to conventional bonds, which many Muslims do not consider permissible to hold as they pay interest.
The transaction marks Mashreq’s return to the debt capital markets following its last issue in 2024.
It is also the first deal from the Central and Eastern Europe, Middle East and Africa region since the announcement of US tariffs triggered heightened volatility across global markets.
Despite what was said to be a challenging backdrop, Mashreq stuck to its decision to proceed with a public offer, capping the size at $500 million.
The sukuk attracted demand from investors in Europe, Asia and the Middle East.
The order book peaked at $2.9 billion – the largest ever for Mashreq bonds – representing an oversubscription of nearly six times and drew interest from more than 90 investors.
The offering, which was slated to close on April 16, closed a day early.
The sukuk was initially priced at 140 basis points over US Treasuries but the final pricing was tightened to 105 basis points.
Mashreq’s group CEO Ahmed Abdelaal said that the sukuk supports the bank’s growth ambitions into 2025 and beyond and helps re-open debt capital markets for regional issuers.
The Middle East received the majority of the allocation, at 75 percent, while Europe, including the UK, accounted for 16 percent. The remainder was divided between Asian markets and offshore US interest.
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