Dubai Islamic Bank announced the issuance of sustainable sukuk worth $1 billion, with a maturity period of five years, at a profit rate of 5.243 percent per annum, representing a margin of 95 basis points over the yields of US Treasury bonds for more than five years.
The bank stated that these sukuks were issued in accordance with the Dubai Islamic Bank’s Sustainable Finance Framework, which was established to facilitate financing related to environmental, social and governance initiatives and projects.
The pricing of the issue reflects the lowest credit spread ever achieved by DIB, making the bank one of the select few financial institutions in the Middle East to remain within 100 basis points of a senior issuance. The $1 billion issuance is the largest sustainable issuance by a financial institution in the Middle East in almost a year, the bank said in a statement.
The issuance received significant interest from investors from Europe, Asia and the Middle East. The sukuk was priced following a comprehensive marketing campaign that included Singapore and London, during which DIB briefed investors on its financial performance and sustainable financing framework as part of its strategy and plans in the field of environmental, social and institutional governance.
The subscription witnessed a great turnout from investors, as despite the increase in the size of the issue, the subscription was covered by more than two and a half times, in a clear indication of the strength of the bank’s financial performance and the impression left by the bank’s sustainable journey among its investor base at the regional and global levels.
Adnan Chilwan, Group CEO of Dubai Islamic Bank, said: “We are pleased to announce the successful issuance of our third sustainable sukuk, an achievement that reflects our firm commitment to environmental, social and governance principles, and is in line with the sustainability agenda and achieving net zero emissions in the UAE, in order to achieve the country’s ultimate goal in this field of achieving climate neutrality and the Dubai Clean Energy Strategy.”
He added, “Despite the competitive environment of the current issuance market, we succeeded in accelerating the issuance implementation due to strong investor demand, with demand exceeding US$2.5 billion, which allowed us to increase the issuance size within the target price range.”
The Sukuk were issued under the Dubai Islamic Bank Limited Sukuk Issuance Programme and listed on both Euronext Dublin and Nasdaq Dubai.
Standard Chartered Bank is acting as the sole sustainability arranger and joint bookrunner, while Al Rajhi Capital, Bank ABC (Arab Banking Corporation), Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, J.P. Morgan, KFH Capital, Mashreq Bank and Sharjah Islamic Bank have been mandated to act as joint lead managers and joint bookrunners for the Sukuk.
