Dubai Islamic Bank Successfully Prices USD 750 Million Inaugural Sustainable Sukuk

Published on: 23 November 2022
by KnowESG
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Dubai Islamic Bank PJSC (DIB), rated A3 by Moody's and A by Fitch successfully priced its inaugural Sustainable Sukuk – a landmark USD 750 million 5-year senior issue with a profit rate of 5.493% per annum representing a spread of 155bps over 5-Year US Treasuries.

The Sukuk was issued in line with DIB’s Sustainable Finance Framework, which was created to facilitate the financing of green and social initiatives and projects. This deal achieved several landmarks as the first-ever Sustainable Sukuk from a UAE Financial Institution and the largest issue size (USD 750 million) in the international capital markets from a GCC bank since February 2022.

This deal once again demonstrated DIB’s leadership in Islamic and Sustainable finance, with an established and strong investor following from Europe, Asia and the Middle East. The Sukuk was priced after completing a comprehensive marketing exercise where DIB updated investors on its positive financial performance as well as its Sustainable Finance Framework. Despite achieving the largest size on a GCC bank deal since February 2022, the book was 2.3x oversubscribed.

Dr. Adnan Chilwan, Group Chief Executive Officer, DIB, commented, “We are delighted to have issued our inaugural Sustainable Sukuk today. This deal was very important for DIB given our strong commitment to Sustainable Finance and the UAE’s Net Zero agenda and the Dubai Clean Energy Strategy. I was particularly pleased with the investor response which enabled us to issue a larger size (USD 750 million) well within our pricing parameters and the success of this transaction continues to highlight the confidence investors place in DIB. While we may be the first UAE bank to issue a Sustainable Sukuk, I sincerely trust we have set a precedent here for other UAE banks to follow.”

The Sukuk is issued under DIB Sukuk Ltd. and is listed on Euronext Dublin and NASDAQ Dubai.

Standard Chartered Bank acted as Sole Sustainability Structurer while Bank ABC, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, KFH Capital, Sharjah Islamic Bank, Standard Chartered Bank and The Islamic Corporation for the Development of the Private Sector acted as Joint Lead Managers and Bookrunners on the transaction.

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Source: DIB

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