Ras Al-Khaimah Eyes Sovereign Sukuk Issue

The emirate of Ras al-Khaimah is eyeing a return to bond markets this year after inviting banks to pitch for arranger roles on a potential dollar-denominated sukuk, sources said on Thursday.

A deal from the emirate, one of the seven which makes up the United Arab Emirates, isn’t expected until at least the third quarter of this year because Ramadan, the Muslim holy month of fasting, is due to start at the end of June, one of the sources said, speaking on condition of anonymity.

Ras al-Khaimah, rated A by Standard & Poor’s and Fitch Ratings, was last in international bond markets in October with a $500 million five-year sukuk that priced at a spread of 175 basis points over mid-swaps.

Those levels were considered fairly tight at the time – it priced inside the curve, according to leads – but it is a sign of how strong sentiment towards the Gulf is that the sukuk is trading even better now.

The sukuk is trading in the secondary market to yield a profit rate of 2.40 per cent at a Z-spread of 93.6 bps, according to Thomson Reuters data.

That transaction was arranged by Al Hilal Bank, Citigroup , Mashreq, National Bank of Abu Dhabi and Standard Chartered.