Mashreqbank accelerated the launch of its US$500 million no-grow five-year sukuk, pricing the deal on Tuesday—one day ahead of schedule—after receiving robust investor interest and taking advantage of favorable credit market conditions.
The issuance marks the first deal from the CEEMEA region (Central and Eastern Europe, Middle East, and Africa) since U.S. President Donald Trump’s tariff announcement on April 2. As one of the highest-rated banks in the UAE (A3/A/A), Mashreqbank was seen as a strong candidate to reopen the market.
The mandate for the sukuk was announced Monday, with the deal originally set to launch on Wednesday following investor meetings in London. However, a surge in demand and conducive market conditions prompted the leads to act sooner, according to IFR.
Books initially opened at around 140 basis points over U.S. Treasuries. But with demand peaking at US$2.8 billion, the final spread was tightened sharply to 105bp, still leaving the final order book at US$2.65 billion.
A lead banker involved in the transaction said the sukuk priced “in line with fair value,” adding that international investors participated alongside regional buyers.
“What this says is that GCC liquidity is healthy and investors in the region are willing to buy in the primary at minimal or without any new issue premium,” said the banker.
By opting for the sukuk format—Islamic bonds that comply with Shariah law—Mashreqbank tapped into a market that has demonstrated resilience amid recent global uncertainties.
“No GCC account passed on this from a liquidity point of view. There’s been a continued bid. That’s why sukuk have outperformed broader EM,” the banker added, highlighting the strong demand from local accounts that typically support this asset class.
Mashreqbank’s previous issuance was in June 2023, when it sold a US$500 million perpetual non-call 5.5-year Additional Tier 1 bond. Before that, it issued capital instruments twice in 2022, including both AT1 and Tier 2 debt. The bank last accessed the senior format market in 2019 with a conventional bond maturing in February 2024.
With this sukuk, Mashreqbank reinforces its position in the debt capital markets while sending a positive signal on the strength of regional liquidity, particularly in the GCC sukuk space.
