Mubasher: Al Baraka Banking Group has reported that its Islamic Sukuk issue was five times oversubscribed, reaching an amount of $1.6 billion.

The value of the issue was initially $300 million, but was increased to $400 million on 23 May, following higher demand from Gulf, Asian, and European stock markets, the Bahrain-based banking group said in a statement.

“The sukuk structure is a Sharia-compliant Mudaraba, with a profit rate for an initial five-year term set at an expected return of 7.875% p.a., with five-year resets thereafter,” Al Baraka revealed.

The sukuk will be listed on the Irish Stock Exchange, the bank said, noting that it appointed Standard Chartered Bank as the global coordinator.

The joint lead manager syndicate is comprised of Bank ABC, Dubai Islamic Bank (DIB), Emirates NBD Capital, KFH Capital, Noor Bank, QInvest, and Standard Chartered Bank.

"It is the first Tier 1 sukuk issuance from Bahrain and the first in terms of size to be issued by a private sector institution," CEO Adnan Ahmed Yousif commented.

Al Baraka last reported that its net profits slid 25.2% to reach $51.51 million in the first quarter in 2017, compared to $68.84 million in Q1-16.

The Bahrain-listed firm had previously reported a 6.48% decline in its profits to $267.64 million in 2016, from $286.19 million in 2015.