US$1bn sukuk for TDIC

Published: October 27, 2009

Abu Dhabi's Tourism Development and Investment Company (TDIC) has become the first government entity to issue an Islamic bond. Its five-year, US$1bn ijara sukuk was priced at 230 basis points over mid swaps and was almost seven times oversubscribed.

Some 60% of investors subscribing for the issue came from the Middle East, with the remainder split evenly between Europe and Asia. The investor breakdown saw 48% of the issue subscribed for by banks and treasury, 21% by asset managers, 15% by central banks and 14% by private banks.

Mohammed Dawood, director of debt capital markets at HSBC Amanah, which acted as lead manager, says: "The TDIC sukuk is significant for a number of reasons: it is the first sukuk ever to be issued by an Abu Dhabi government entity, and the largest non-sovereign sukuk to be issued from the Gulf region during 2009."

TDIC is responsible for the development of Abu Dhabi’s infrastructure projects such as the flagship Saadiyat Island, which will house the Louvre museum, a campus for New York University and a Guggenheim art gallery. These projects are part of an economic development plan for the Emirate.