Ras Al Khaimah government completes $1 billion sukuk issuance

Khaleej Times

09-03-2025

The Government of Ras Al Khaimah, acting through the Investment and Development Office of Ras Al Khaimah, successfully closed its offering of a 10-year $1 billion senior unsecured sukuk at a profit rate of 5.038 per cent on March 5, a statement said.
The Government of Ras Al Khaimah tapped the international debt capital market after 10 years and the issuance of the sukuk was completed under the government's $2 billion trust certificate issuance programme which was signed on February 28.
The sukuk was issued under the programme by RAK Capital, a special purpose vehicle affiliated with the Government of RAK. The issuance follows S&P Global Ratings' affirmation of its 'A' rating and Fitch's affirmation of its 'A+' rating on RAK Capital's sukuk programme, which is in line with the credit agencies' ratings for the emirate's government.
The sukuk is consistent with the most recent Shariah developments, as promulgated by the UAE Central Bank Higher Shariah Authority, with the sale of the ijara assets being an enforceable sale with a specific exemption by decree for registration of the real estate ijara assets. 'In this manner, the RAK Government has adhered to the most Shariah-compliant structure,' a statement said.
The RAK government announced the issuance on March 3 and conducted virtual roadshows to meet multiple investors from across the globe, including Asia, the GCC, Europe and the UK. Following the successful roadshow, RAK Capital priced the transaction on March 5 while listing the sukuk on Nasdaq Dubai.
The transaction was launched at an initial pricing guidance of 10-year US Treasury plus 120 bps. Strong investor demand and an orderbook of over $4.4 billion enabled the government to compress the final pricing by 40 bps to 10-year US Treasury plus 80 bps. The issuance was subscribed by global investors including 57.8 per cent from Mena, 35 per cent from the UK/continental Europe and 7.2 per cent from Asia and others.
Citi and Emirates NBD Capital acted as structuring advisers, while Abu Dhabi Commercial Bank, Citi, Emirates NBD Capital, First Abu Dhabi Bank, RAKBANK and Standard Chartered Bank acted as joint global coordinators.
An official spokesperson said: 'The Government of Ras Al Khaimah is delighted with the overwhelming response that we have received from investors globally. The strong investor demand demonstrates confidence in Ras Al Khaimah's creditworthiness, fiscal management and economic fundamentals, which is exemplified by the high oversubscription level of 4.4 times for the issuance. The New Issue Concession priced into the deal 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.'