Mumtalakat launches first US dollar sukuk

20 November 2014

Bahraini sovereign wealth fund last tapped US dollar debt capital markets in 2010

Bahrain’s sovereign wealth fund Mumtalakat has raised a $600m seven-year sukuk (Islamic bond), which is also its first US dollar-denominated sukuk.

It is also the fund’s first US dollar bond issuance following its inaugural conventional bond raised in 2010. Mumtalakat has previously raised sukuk in Malaysian ringgit.

The order book was opened on 17 November and was 4.3 times oversubscribed, raising $2.6bn, with 150 accounts participating.

Middle East investors accounted for 81 per cent of the issuance, with 19 per cent allocated to Asian and European investors.

The sukuk has a 4 per cent profit rate. It achieved a final pricing of 205 basis points over US dollar mid-swaps. It was issued under the fund’s $1bn multi-currency trust certificate issuance programme listed on Ireland’s stock exchange.

French bank BNP Paribas, Germany’s Deutsche Bank, Japanese bank Mitsubishi UFJ Financial Group and the UK’s Standard Chartered were joint lead managers on the sukuk, with the local Arab Banking Corporation and National Bank of Bahrain acting as co-lead managers.

While Mumtalakat suffered during the global financial crisis, the fund returned to profitability in 2013. It is now eyeing investment opportunities outside Bahrain.

Speaking to MEED in early September, CEO Mahmood al-Kooheji said the fund was “actively pursuing international deals”.

In mid-October, Mumtalakat joined a group of investors that acquired a minority stake in the UAE-based Gems Education’s emerging market business. The company is a provider of private education and operates more than 50 schools.

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