Dubai Islamic Bank prices $1B Sustainable Sukuk

Dubai Islamic Bank PJSC (DIB) has priced its second Sustainable Sukuk at USD 1 billion for a senior issue with a profit rate of 4.80% per annum, representing a spread of 102.4bps over 5-Year US Treasuries.

The Sukuk was issued according to DIB's Sustainable Finance Framework for green and social initiatives. This made it the largest issuance by a Middle East financial institution on international capital markets since June 2021 and the largest-ever sustainable issuance by a Middle East financial institution.

DIB's leadership in Islamic and sustainable finance was demonstrated through the Sukuk, which attracted a strong investor following from Europe, Asia, and the Middle East. The Sukuk was priced following a comprehensive marketing exercise where DIB updated investors on its financial performance and sustainable finance framework, resulting in an overwhelming response from investors and a 3x oversubscription despite issuing a larger size of USD 1 billion, which was the largest book size seen for a GCC bank in over a year.

Dr. Adnan Chilwan, Group Chief Executive Officer, DIB, commented: “Driven by our detailed and meticulously crafted balanced growth strategy as well as the bank’s commitment towards the Sustainability agenda of the UAE and the larger “Net Zero by 2050” goal of the nation, we are delighted to announce the issuance of our second Sustainable Sukuk today, the largest-ever by a Middle East Financial Institution.

"The success of DIB’s inaugural sukuk in 2022 strongly reflected the market’s faith in the franchise and the reputation the bank enjoys in the local and international capital markets. With more than $3 billion in orders from investors, we were able to issue a larger amount of bonds while still staying within our price range.

"I would like to thank our investors for the continued trust and confidence placed in DIB. As the country gets ready to host COP 28, we are still committed to helping the UAE reach its long-term goals for sustainability. We hope the success of our offering will encourage other issuers from the UAE to follow suit in this format.”

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Source: Dubai Islamic Bank