Ras Al Khaimah issues USD 1 bn sukuk, which was 4.4x oversubscribed

RAK completes USD 1 bn sukuk issuance: The Government of Ras Al Khaimah’s Investment and Development Office (IDO) has successfully closed its offering of a 10-year USD-denominated 1 bn senior unsecured sukuk at a profit rate of 5.038%, state news agency Wam reports. The Reg S benchmark sukuk comes as part of the RAK Government’s USD 2 bn Trust Certificate Issuance program, which was signed on 28 February, according to Wam.

The details: The issuance, which had initial price thoughts at Treasuries +120 bps, saw a final pricing of 10-year Treasuries +80 bps after having received strong investor demand and an orderbook of over USD 4.4 bn. Sukuk trustee RAK Capital’s program received a rating of A from S&P Global Ratings’ and an A+ rating from Fitch.

Who bought in: The sukuk saw subscriptions from global investors, including 57.8% from MENA, 35% from the UK/continental Europe and 7.2% from Asia and other countries.

What they said: “The New Issue Concession priced into the [issuance] was -10 bps, which is a clear recognition of Ras Al Khaimah’s strong credit position and a stamp of approval from the international investor community for the Emirate’s remarkable growth and success story,” an official spokesperson for the Government of Ras Al Khaimah told Wam.

ADVISORS- Abu Dhabi Commercial Bank, Citi, Emirates NBD Capital, First Abu Dhabi Bank, The National Bank of Ras Al Khaimah (Rakbank), and Standard Chartered are acting as global coordinators. Citi and Emirates NBD Capital are serving as Sukuk Structuring Agents.

Part of a wider wave of issuances: The RAK sukuk marks the first government issuance from the UAE this year, amid a surge in sukuk and Reg S bond issuances by banks and corporates. First Abu Dhabi Bank (FAB) and real estate developer Damac also took to market their USD 750 mn sukuk issuances in the past couple of months. Meanwhile, Sharjah Islamic Bank is preparing a USD 500 mn Reg S five-year sukuk, while Emirates NBD plans to issue a USD 1 bn Reg S additional tier 1 capital security.

Total sukuk issuance volume from UAE-based issuers reached USD 14.4 bn in 2024, with S&P Global Ratings projecting a steady USD 14-15 bn in 2025, primarily driven by bank and corporate issuances.