UAE: Abu Dhabi Islamic Bank successfully issues $500m green senior sukuk

Abu Dhabi Islamic Bank (ADIB) has successfully raised $500m via a green sukuk offering.

The bank priced the five-year senior sukuk rated A+ by Fitch at a profit rate of 5.695 per cent per annum payable semi-annually.

The new sukuk will be listed and traded on London Stock Exchange’s International Securities Market and Sustainable Bond Market.

The issuance attracted interest from more than 100 global and regional investors with the final order book closing at $2.6bn, representing an oversubscription rate of 5.2 times.

Sukuk proceeds will fund green projects

The bank intends to allocate an amount equal to the net proceeds of this issuance to fund eligible green projects to accelerate climate transition, which may include the financing or refinancing of green projects as well as financing customers for eligible green projects as described under the eligibility criteria in its sustainable finance framework.

Nasser Al Awadhi, ADIB group CEO, said: “We are thrilled to be the first financial institution in the world to issue the first USD-denominated green sukuk, which builds on ADIB’s efforts to address climate change and to advance sustainable solutions that protect the environment and help facilitate a transition to a low-carbon economy.

“We have received exceptional interest from a broad range of domestic, regional and international investors. Demand for this issuance exceeded the issue size by 5.2 times, highlighting the tremendous demand and confidence from global investors in ADIB’s asset quality. We are also pleased to see this strong international demand continue as the pricing was tightened significantly.”

ADIB Islamic bond redeemed

In other news, ADIB completed the planned redemption of its $750m additional tier-one (AT1) perpetual sukuk in September.

The Islamic bond was issued in September 2018 at a profit rate of 7.13 per cent and was fully redeemed at the trustee call amount, equal to the prevailing face amount of the certificates plus any outstanding payments as of September 20, 2023.

The redemption of the Islamic bond comes after ADIB raised $750m US dollars denominated AT1 perpetual sukuk.

Read: UAE’s green, sustainable finance enjoy two years of rapid growth