The Arab Energy Fund (TAEF) is preparing to return to international debt markets, lining up a syndicate of global and regional banks to engage fixed-income investors ahead of a potential $500 million sukuk offering.
Investor discussions are scheduled to begin on June 9, with the fund considering the launch of a benchmark-sized U.S. dollar-denominated senior unsecured sukuk under its existing trust certificate programme, depending on market conditions. The proposed Islamic bond would carry a five-year maturity, running through June 2031.
Early pricing discussions place the deal at around 80 basis points above SOFR mid-swaps.
To steer the transaction, TAEF has assembled a broad banking group comprising Bank ABC, BMO Capital Markets, Citi, Crédit Agricole CIB, Emirates NBD Capital, KFH Capital, Standard Chartered and the Islamic Corporation for the Development of the Private Sector. The institutions will act as joint lead managers and bookrunners.
The prospective sukuk is expected to secure strong investment-grade ratings, with anticipated assessments of Aa2 from Moody’s and AA+ from Fitch. The fund currently holds ratings of Aa2 with a stable outlook from Moody’s, AA- with a stable outlook from S&P, and AA+ with a negative outlook from Fitch.
The planned fundraising follows a successful market outing earlier this year. In January, TAEF raised $500 million through a 10-year sukuk transaction that was priced at 85 basis points above SOFR mid-swaps. Investor appetite proved robust, with demand exceeding $1.6 billion, more than three times the amount offered.
The latest move signals the fund’s continued access to deep pools of capital as regional issuers capitalize on sustained investor demand for high-quality Gulf debt and Islamic finance instruments.
