Government of Dubai launches USD750m Sukuk Al Ijara as roadshow opens in Dubai

The issue was launched at the Dubai investor presentation held at Emirates Towers under the patronage of H.H. Sheikh Ahmed Bin Saaed Al Maktoum, Chairman of Emirates Group and DCA President and by Dr. Mohammed Khalfan Bin Kharbash, UAE Minister of State for Finance and Industry and Chairman of Dubai Islamic Bank (DIB). This is the largest Sukuk issue in the history of Islamic banking.

The presentation, attended by the top officials of the joint lead banks involved in the issue, signaled the start of the roadshow, which will move on from Dubai to other countries in the region including Bahrain and Kuwait.

DIB, which is acting as the Mandated Lead Manager, will also be one of the joint bookrunners alongside Citigroup and HSBC. The issue is fully underwritten by a six-member group of banks including the three bookrunners, Gulf International Bank, Kuwait Finance House and Standard Chartered Bank. The issue is expected to be listed in Luxembourg and on the Dubai Financial Market.

In a speech to bankers gathered at the investor presentation, Sheikh Ahmed hailed the issue as a landmark transaction and stated that the Government of Dubai had taken a conscious decision to opt for Islamic financing. Sheikh Ahmed added: "What better way to channel the liquidity in the region than to deploy it in local projects.

"The Islamic banking sector has been progressing at a rate few of us could have anticipated. This is a welcome development, precipitated by local and international banks. This Sukuk is important to the development of Dubai and is crucial to our local and regional businesses."

Dr Kharbash said: "Our thanks go to the Government of Dubai and to Sheikh Ahmed for their bold decision to take a different direction when considering Dubai's funding requirements for its projects. Naturally, we are proud and delighted to have been awarded the mandate to lead manage this issue on behalf of the Department of Civil Aviation."

"We are especially pleased that we have been joined in this operation by our partners Citigroup, HSBC, Gulf International Bank, Kuwait Finance House and Standard Chartered Bank.

"I believe that the decision to opt for Islamic funding is a positive sign for all of us. It signals the maturing of Islamic finance and that is no longer niche funding for a limited range of projects."

Mr. Sajjad Razvi, Citigroup's Country Officer, said: "We are proud to be among the lead managers of this debut issue on behalf of Dubai's Department of Civil Aviation."

Mr. Mohamed Al Shroogi, Citigroup's Managing Director Middle East and Chairman of CIIB, said: "Citi Islamic Investment Bank once again proves that it is at the forefront of the Islamic finance industry. We are delighted that Citigroup is helping to finance the ambitious expansion plans of Dubai through Shari'a-compliant methods."

Mr. Iqbal Khan, Chief Executive Officer of HSBC Amanah, said: "HSBC is delighted to be associated with this Islamic capital markets issue for the Government of Dubai. As a pioneer of the international Sukuk market, HSBC Amanah would like to commend the Government on its inaugural Sukuk issue. HSBC is proud to be one of the three bookrunners for this prestigious transaction which is a landmark for Dubai."

Mr. Abbas Ameeri, Managing Director of merchant banking at GIB, said: "We are delighted to be part of this landmark Sukuk financing for the Government of Dubai and the Department of Civil Aviation. The quality of the banks supporting the Sukuk issue as Joint Lead Managers is also widely reflective of the confidence the wider financial market has in the credit standing of Dubai.

"It is also a reflection of the commitment of GIB to its valuable customer relationships, and to the provision of innovative structured solutions to its wider client base. GIB is a leading regional wholesale merchant bank, whose core objective is to promote and support regional economic growth."

Mr. Emad Al Monayea, Head of the International Investment Department of Kuwait Finance House (KFH), said: "We are pleased to be associated with the Government of Dubai Department of Civil Aviation as a Joint Lead Manager for their first Sukuk issue. It has been a further pleasure to cooperate with Dubai Islamic Bank, the Mandated Lead Manager, and other leading financial institutions and banks.

"The issue is a landmark deal as it is the largest Islamic Sukuk Issue so far in the history of Islamic banking. KFH is contributing its best efforts towards developing the Sukuk market and deals like this will contribute greatly to the progress of a capital market for Islamic financial institutions."

Mr. Ray Ferguson, Chief Executive at Standard Chartered Bank UAE (SCB), said: "The bank is delighted to be one of the lead managers for the landmark first Sukuk by DCA. Standard Chartered has been in the UAE for almost 50 years and is committed to being an integral component of the banking industry of the UAE."

Mr. Deepak Kohli, Head of Capital Markets at SCB, said: "The DCA Sukuk will help bolster the growing global Islamic finance market and also allow the Government to tap a major funding source in the GCC. Being a dollar-denominated security open for investment to conventional investors it will become a benchmark for pricing other securities."