Bahrain's GFH Financial Group completes $500m sukuk issuance

The company will use the proceeds to 'further strengthen GFH’s balance sheet and diversify its income'

GFH Financial Group completed the issuance of its $500 million (Dh1.83 billion) sukuk programme. Courtesy Nasdaq Dubai

Bahrain's GFH Financial Group completed the issuance of its $500 million (Dh1.83 billion) sukuk programme after selling the remaining amount of $200m.

The investment bank did not provide the details of the transaction in a filing to the Dubai Financial Market, where its shares trade.

“The proceeds from the sukuk issuance will be used to further strengthen GFH’s balance sheet and diversify its income,” it said on Tuesday.

The deal comes after a $300m Islamic bond that the company sold in January this year.

The five-year sukuk was two and a half times oversubscribed, with the order book exceeding $750m.

There was strong participation from international investors who received 48 per cent of the allocation, with the remaining 52 per cent going to regional investors, the company said at the time.

The deal in January was GFH’s first debt capital markets transaction since 2008.

Shuaa Capital, along with other parties, priced and issued the sukuk.

In February, GFH acquired a 70 per cent stake in FinTech company Marshal – its second major investment in a technology business – through its investment banking arm, GFH Capital.

The lender's  first major technology investment was its acquisition of an 85 per cent stake in discount voucher app The Entertainer in 2018.

It has since invested extensively in expanding its real estate portfolio.

The bank purchased a US hospitality portfolio in partnership with investment firm Arbor Lodging Partners for $250m in February.

Earlier this year, GFH reported a 38.7 per cent decline in its 2019 fourth-quarter net profit to $6.5m.

Higher provisions for credit losses from the group’s commercial banking subsidiary affected quarterly financial results, it said, without providing the provision figures.

The bank’s full-year profit for 2019 also fell by 29.8 per cent to $80.1m.

GFH’s revenue, however, climbed to $335.7m from $286.2m reported at the end of 2018, it said at the time.