The government of Ras Al Khaimah has successfully closed its offering of a 10-year $1 billion senior unsecured sukuk at a profit rate of 5.038 percent on March 5, 2025, it announced on Thursday. The offering was oversubscribed 4.4 times.
The government 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, 2025.
The sukuk was issued under the programme by RAK Capital, a special purpose vehicle affiliated with the government of Ras Al Khaimah.
Read: Ras Al Khaimah real estate transactions grow 118 percent to over $4 billion in 2024
Strong credit ratings
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 government of Ras Al Khaimah.
The sukuk is consistent with the most recent Shari’a developments, as promulgated by the UAE Central Bank Higher Shari’a 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.
The offer process
The government announced the issuance on March 3, 2025, and conducted virtual roadshows to meet multiple investors from across the globe, including Asia, the GCC, Europe and the UK.
Read: Ras Al Khaimah ranks 1st globally in Expat Essentials Index, 2nd in Working Abroad Index
Following the successful roadshow, RAK Capital priced the transaction on March 5, 2025, while listing the sukuk on the 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.
Strong demand
The issuance was subscribed by global investors, including 57.8 percent from MENA, 35 percent from the UK/continental Europe, and 7.2 percent from Asia and others.
Citi and Emirates NBD Capital acted as structuring advisors, while Abu Dhabi Commercial Bank, Citi, Emirates NBD Capital, First Abu Dhabi Bank, RAKBANK and Standard Chartered Bank acted as joint global coordinators.
“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,” an official spokesperson for the government of Ras Al Khaimah said.
