The Government of Ras Al Khaimah has successfully launched a $1 billion 10-year Regulation S benchmark sukuk, marking a significant development in the emirate’s financial landscape. This Islamic bond issuance is set to be listed on Nasdaq Dubai, underscoring Ras Al Khaimah’s commitment to leveraging Islamic finance instruments for its fiscal strategies.
The sukuk was priced at 80 basis points over U.S. Treasuries, reflecting strong investor confidence. The order book exceeded $4.1 billion, excluding joint lead manager interest, indicating robust demand for the issuance. Initial price thoughts were in the area of 120 basis points over U.S. Treasuries, but the overwhelming interest allowed for tighter pricing. The settlement date for the sukuk is scheduled for 12 March 2025.
RAK Capital has been designated as the sukuk trustee, with the Government of Ras Al Khaimah acting through its Investment and Development Office . The proceeds from this issuance are earmarked for general government and budgetary purposes, aligning with the emirate’s strategic financial planning.
A consortium of financial institutions played pivotal roles in bringing this sukuk to market. Abu Dhabi Commercial Bank, Citi, Emirates NBD Capital, First Abu Dhabi Bank, RAKBANK, and Standard Chartered Bank were appointed as Joint Global Coordinators. Additionally, Citi and Emirates NBD Capital served as Sukuk Structuring Agents, contributing their expertise to structure the Islamic bond in compliance with Shariah principles.
The Government of Ras Al Khaimah holds credit ratings of A from Standard & Poor’s and A+ from Fitch Ratings, both with a stable outlook. These ratings reflect the emirate’s solid economic fundamentals and prudent fiscal management, factors that likely contributed to the strong investor appetite for the sukuk.
This sukuk issuance comes at a time when the global Islamic finance market is experiencing notable growth. Investors are increasingly seeking Shariah-compliant instruments, and Ras Al Khaimah’s successful entry into this market segment highlights its strategic vision to diversify funding sources and attract a broader investor base.
The decision to list the sukuk on Nasdaq Dubai further enhances the emirate’s visibility in international capital markets. Nasdaq Dubai, known for its robust regulatory framework and international standards, provides issuers with access to a wide range of regional and global investors. This listing is expected to bolster Ras Al Khaimah’s financial profile and strengthen its position as a credible issuer in the Islamic finance domain.
The overwhelming subscription to the sukuk underscores the confidence investors have in Ras Al Khaimah’s economic prospects. The emirate’s strategic location, coupled with its investor-friendly policies and stable economic environment, continues to attract substantial interest from both regional and international investors.
In recent years, Ras Al Khaimah has embarked on various initiatives to diversify its economy and enhance its infrastructure. The funds raised through this sukuk issuance are anticipated to support these initiatives, contributing to sustainable economic growth and development.