Bahrain's Unicorn Closes US$450 Million Sukuk

Unicorn Investment Bank, the Bahrain-based financial services group, has closed a US$450 million five-year sukuk on behalf of Saudi real estate company, Dar Al Arkan.

The sukuk, which offers a yield of 11%, will be used to finance the company's current and future development projects.

It marks the first international issue out of the GCC this year and was jointly led and managed by Unicorn, Deutsche Bank Securities and Goldman Sachs International, who were also the joint book runners.

Unicorn was the Sharia adviser to the transaction.

The sukuk attracted significant interest from investors in the GCC, Europe, Asia and the US, with Dar Al Arkan opting to close the issue at US$450 million.

"We are pleased at the positive response that we received from the international financial community, particularly given recent events in both the GCC and Europe, especially with the prevailing uncertainty in the international capital market.

"This has resulted in a particularly tough environment," said Unicorn head of capital markets and institutional banking, Ikbal Daredia.

"We have seen several bond issues pulled in recent weeks both within and outside the GCC, and our ability to successfully close this transaction reaffirms the strength of Dar Al Arkan's business model and the company's strong growth prospects."

"The success of this sukuk issue, given the adverse economic climate both regionally and internationally, is a testament to investor confidence in both Dar Al Arkan and Saudi Arabia," said Unicorn Managing Director and Chief Executive Officer Majid Al Sayed Bader Al Refai.

"Unicorn is proud to have brought this transaction to the market, and we look forward to continuing to play an important role in the development of the Islamic capital market."

Moody's Investor Service has assigned a provisional rating of Ba2 to the sukuk, while Standard & Poor's Ratings Service has assigned a provisional rating of BB- to the issue.

Moody's has also assigned a Ba2 rating to Dar Al Arkan, the largest developer in Saudi Arabia by market value. - Gulf Daily