Dubai-based developer Omniyat has successfully launched its inaugural dollar-denominated sukuk, upsizing the issuance to $500 million from an initial target of $400 million. The offering attracted robust investor interest, with the order book reaching $1.8 billion, allowing the company to tighten pricing to 8.375%.
The issuance, structured as a five-year senior unsecured sukuk, marks Omniyat’s entry into the Islamic capital markets. The strong demand underscores investor confidence in both the issuer and the broader Islamic finance sector. Despite the oversubscription, the sukuk is trading around par, suggesting that the pricing was fair and left limited room for immediate price appreciation.
The successful launch of Omniyat’s sukuk comes amid a growing appetite for Islamic debt instruments. According to Fitch Ratings, the global sukuk market reached $823.4 billion by the end of the third quarter of 2023, reflecting a 9.8% annual growth. This surge is attributed to various factors, including the need to fill budget gaps, diversify funding options, and expand liquidity sources for banks.
The United Arab Emirates, where Omniyat is based, plays a significant role in the global sukuk market, accounting for 6% of the total outstanding sukuk as of Q3 2023. The country’s commitment to compliance with the standards of the Accounting and Auditing Organisation for Islamic Financial Institutions and its strategic initiatives to diversify funding options have bolstered its position as a key player in Islamic finance.
Omniyat’s successful sukuk issuance reflects the company’s strong market position and the depth of liquidity available for Islamic debt. The transaction also highlights the growing interest among investors in Sharia-compliant financial instruments, particularly in the real estate sector.
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