Arab Petroleum Investments Corporation sells $500 million 5-year sukuk
Sale oversubscribed almost seven times as investors outside region get lion's share
The Arab Petroleum Investments Corporation (Apicorp) sold a US$500 million 5-year sukuk as part of its $3 billion trust certificate programme in a sale that attracted almost seven times the amount available for sale.
The Islamic bonds were sold at 100 basis points over mid-swaps and attracted $3.45bn in subscriptions from over 215 investors.
Middle East and North Africa investors bought 41 per cent of the bonds on sale, while European, Asian and offshore US investors purchased 59 per cent, the company said.
“We are delighted with the heavy over-subscription of this sukuk transaction,” said Ahmed Attiga, the chief executive officer of Apicorp.
“It is clear with over 200 investors across various jurisdictions, we have firmly planted the Apicorp flag in the capital markets allowing us to develop strong relationships with new fixed income investors. The success of this transaction is testament to Apicorp’s impressive 40-year track record, unique ownership structure and strong fundamentals, and reassuring Aa3 credit rating,” Mr Attiga said.
GCC sukuk issuances jumped 37.7 per cent in the first half of 2017 as governments seeking to plug deficits amid low oil prices diversified away from conventional bonds they have been loading up on in recent years, according to S&P Global Ratings.
Sukuk sales in the region are projected to increase to between $75bn and $80bn this year, up from its previous forecast of $60bn to $65bn, as a result of a push to diversify their investor base, according to S&P.
Apicorp said it had previously sold sukuk in 2015 and bonds twice in the Taiwanese Formosa market.
It didn’t say what it would use the proceeds of the sukuk sale for.
Apicorp mandated Bank ABC, Credit Agricole, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, KFH Capital and Standard Chartered as joint lead managers and joint bookrunners for the sukuk sale, according to Bloomberg.
Updated: November 7, 2017 07:13 PM