UAE:. Majid Al Futtaim Holding LLC (MAF), the highest rated private corporate in the Middle East, announced that it has successfully priced a US$ 400 million sukuk issue on 31 January 2012. The transaction was priced only hours after the end of the roadshow, with strong demand from regional and international investors.
The sukuk was 4 times oversubscribed with over 140 orders and features well-diversified investor participation. The final distribution of the certificate was well-balanced with investors from Asia (14%), Europe (32%) and Middle East (54%). Banks accounted for 52%, fund managers 42%, and private banks the balance of 6%.
Iyad Malas, CEO of Majid Al Futtaim Holding LLC commented: “The success of our first sukuk issue demonstrates the strength of our credit story and its appeal to a broad investor base. The strong interest received from investors enabled us to raise the amount of funding, $400 million, which we had initially targeted. It represents a key undertaking for the continued growth of our business. We will continue to manage our funding profile proactively.”
This transaction represents Majid Al Futtaim’s first foray into the public debt market and allows Majid Al Futtaim to fulfil its objective of strategically diversifying its sources of funding and extending its liability maturity profile.
This landmark transaction also marks the first issuance by a privately-held UAE-based entity in the international markets for over four years and the largest GCC corporate sukuk issuance in over a year.
The certificates will be issued under the company’s US$1 billion Reg S Sukuk Programme set up earlier this year. The certificates will mature in 2017 and will pay a profit rate to investors of 5.85% per annum. Abu Dhabi Islamic Bank, Dubai Islamic Bank, HSBC Bank Plc and Standard Chartered Bank were joint lead managers and bookrunners on the transaction.
The issue was priced on the back of investor meetings undertaken in the UAE, Kuala Lumpur and London. Members of the senior management team led the roadshow, which was very well attended by both Islamic and conventional investors.
The sukuk structure follows the Wakala concept, with the Certificates being senior and unsecured obligations. Under the terms of the Certificates, Majid Al Futtaim Properties LLC is the obligor, while Majid Al Futtaim Holding is the guarantor.