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Dubai Islamic Bank announced its success in pricing its second issuance of sustainable sukuk, at a value of $1 billion, for a maturity of 5 and a half years, at a profit rate of 4.80% per annum, which is 102.4 basis points higher than the returns of US Treasury bonds for more than 5 years.
The sukuk was issued in accordance with Dubai Islamic Bank’s Sustainable Financing Framework, which was designed to facilitate financing related to environmental and social initiatives and projects.
This issuance was characterized by many advantages, including being the largest issuance by a banking institution from the Middle East in the international capital markets since June 2021, and the largest sustainable issuance ever by a financial institution in the Middle East.
This issuance once again demonstrated Dubai Islamic Bank’s leadership in the Islamic and sustainable financing sector, as it witnessed great demand and interest from investors from Europe, Asia and the Middle East.
The sukuk was priced following the completion of a comprehensive marketing campaign during which DIB briefed investors on its strong financial performance and sustainable financing framework. The subscription witnessed a great turnout from investors, as despite the increase in the size of the issue (to reach one billion dollars), the subscription was covered by more than three times – which in itself represents the largest subscription by a Gulf bank in more than a year.
Dr. Adnan Chilwan, Group Chief Executive Officer of Dubai Islamic Bank, said: “We are very pleased to announce the success of our second sustainable Sukuk issuance, which is the largest ever Sukuk issuance by a financial institution in the Middle East. This issuance is driven by a balanced, detailed and carefully developed growth strategy, in addition to the bank’s firm commitment to achieving the sustainability agenda in the UAE, leading to the country’s ultimate goal in this field by achieving climate neutrality in the year 2050. While our first issuance of sukuk in the year 2022 reflected the market’s confidence in the capabilities of Dubai Islamic Bank and the great position it enjoys in the local and international capital markets. The recent IPO witnessed great interest from investors, as the demand exceeded $ 3 billion, which allowed us to increase the size of the issue within the target price range. As the UAE prepares to host the United Nations Climate Conference (COP 28), we remain committed to playing an active role in achieving the UAE’s long-term sustainability goals. We hope that the success of this issuance will encourage other exporting institutions in the country to follow our example in this regard.”
The sukuk was issued under Dubai Islamic Bank Limited’s sukuk issuance program and is listed on both Euronext Dublin and Nasdaq Dubai.
Standard Chartered Bank is participating as the sole sustainability regulator, and Bank ABC (Arab Banking Corporation), Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, KFH Capital, Mashreq Bank and Sharjah Islamic Bank are mandated , Standard Chartered Bank, and the Islamic Corporation for the Development of the Private Sector, to act as joint lead managers and joint bookrunners for these Sukuk.
