Ras Al Khaimah raises $1bn in sukuk offering amid strong investor demand

Ras Al Khaimah has completed a $1bn sukuk issuance, marking its return to the international debt capital market after a decade.

The offering, conducted through the Investment and Development Office, attracted strong global investor demand, with an oversubscription level of 4.4 times.

The 10-year senior unsecured sukuk, issued under Ras Al Khaimah’s $2bn Trust Certificate Issuance Programme, was priced at a profit rate of 5.038 per cent and listed on Nasdaq Dubai.

The sukuk was issued through RAK Capital, a special-purpose vehicle affiliated with the emirate’s government.

The transaction was launched at an initial pricing guidance of 10-year US Treasury plus 120 basis points (bps). Strong investor demand enabled the government to tighten the final pricing by 40 bps to 10-year US Treasury plus 80 bps.

The issuance attracted a geographically diverse investor base, with 57.8 per cent of subscriptions coming from the MENA region, 35 per cent from the UK and continental Europe, and 7.2 per cent from Asia and other regions.

Ras Al Khaimah sukuk programme gets a stable outlook

The issuance follows rating affirmations from S&P Global Ratings and Fitch, which rated RAK Capital’s sukuk programme at ‘A’ and ‘A+’, respectively, both with a stable outlook.

The sukuk structure aligns with recent Shari’a developments set by the UAE Central Bank Higher Shari’a Authority, including a government decree ensuring the enforceability of real estate ijara assets.

“The government of Ras Al Khaimah is delighted with the overwhelming response from global investors. The strong demand reflects confidence in the emirate’s creditworthiness, fiscal management, and economic fundamentals,” a government spokesperson said. “The high oversubscription and the negative new issue concession of -10 bps highlight Ras Al Khaimah’s strong credit standing and investor confidence in the emirate’s growth trajectory.”

Citi and Emirates NBD Capital acted as structuring advisors for the issuance. Joint global coordinators included Abu Dhabi Commercial Bank, Citi, Emirates NBD Capital, First Abu Dhabi Bank, RAKBANK, and Standard Chartered Bank.

Ras Al Khaimah has maintained credit ratings in the ‘A’ range from Fitch and S&P for 15 years. Known for its diversified economy and strategic location, the emirate continues to attract investment across multiple sectors.

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