Dubai Islamic Bank prices $750m inaugural sustainable sukuk

Dubai Islamic Bank has priced its inaugural sustainable sukuk, a $750m 5-year senior issue with a profit rate of 5.493 per cent per annum representing a spread of 155bps over 5-year US Treasuries.

The transaction marked the first-ever sustainable sukuk from a UAE financial institution and the largest issue size ($750m) in the international capital markets from a GCC bank since February 2022. The book was 2.3x oversubscribed.

The sukuk was priced after completing a marketing exercise where DIB updated investors on its financial performance as well as its sustainable finance framework.

“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,” said Dr Adnan Chilwan, group chief executive officer, DIB.

“I was particularly pleased with the investor response which enabled us to issue a larger size ($750m) 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,” he added.

The sukuk is listed on Euronext Dublin and NASDAQ Dubai.

Standard Chartered Bank acted as sole sustainability structurer while Bank ABC, 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.

The lender posted Dhs4.101bn in group net profit for the first nine months of the year, rising 34 per cent year-on-year, against Dhs3.069bn reported during Q1-Q3 2021.

Read: Dubai Islamic Bank posts 34% rise in group net profit for Q1-Q3 2022