First Abu Dhabi Bank (FAB) has issued the UAE’s first-ever AED-denominated green Sukuk on the 20th July 2023. Worth AED1.3 billion (US$353.88 million), the three-year facility also represents FAB’s first dirham-denominated public issuance.
“As a leading force for investment banking, FAB fully supports the establishment of a thriving dirham bond market, serving to elevate Abu Dhabi’s increasing role as a center for global finance,” Hana Al Rostamani, group CEO of FAB, commented.
The group CEO also views the issuance as a landmark achievement for both the green finance and the Islamic finance sectors in the UAE.
According to Hana, the issuance demonstrates the progress in expanding the group’s offering for clients as well as its efforts toward achieving the UAE’s national priorities on sustainability and economic diversification.
The RegS three-year green Sukuk facility was priced on the 19th July at 4.93%. The proceeds from the Sukuk will be channeled toward projects in compliance with the International Capital Market Association’s Green Bond Principles and Social Bond Principles under the categories of sustainable and transition finance.
While the bank expects to allocate the full amount of the sustainable Sukuk proceeds to eligible projects within the Middle Eastern region within 24 months, the group is notably open to channeling proceeds toward sustainable projects beyond the region.
“Given the global nature of the group’s business and the international operations of many of the group’s clients, the proceeds of any sustainable certificates issue may be applied globally without geographical restriction,” the Sukuk documentation read.
The existing eligible projects will be given priority for funding allocation of up to 100%, with FAB hoping to allocate proceeds to new eligible projects when feasible.
The ISS ESG, which provided the second-party opinion for FAB’s Sustainable Finance Framework which outlines the use of proceeds for the bank’s sustainable finance efforts, opines that the use of proceeds will contribute to the pillars of responsible banking and positive social impact.
“In the context of its updated framework, the bank sets clear and credible sustainability investment criteria for its investments,” the ISS ESG viewed.
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First Abu Dhabi Bank’s Debut Green Sukuk AED1.3 billion (US$353.88 million)  20th July 2023 |
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| Summary of terms and conditions | |
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Issuer |
FAB Sukuk Company |
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Obligor |
First Abu Dhabi Bank |
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Size of issue |
AED1.3 billion (US$353.88 million) |
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Purpose |
To fund green and social projects |
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Tenor |
Three years |
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Issuance price |
100% of the aggregate face amount |
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Profit rate |
4.93% |
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Payment |
Semi-annual |
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Currency |
AED |
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Maturity date |
20th July 2026 |
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Lead manager(s) |
First Abu Dhabi Bank |
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Bookrunner(s) |
First Abu Dhabi Bank, Emirates NBD Bank, HSBC Bank, Sharjah Islamic Bank and Standard Chartered Bank |
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Green structuring agent(s) |
First Abu Dhabi Bank |
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Legal advisor(s)/council |
Allen & Overy |
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Islamic structure |
Murabahah |
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Listing |
London Stock Exchange |
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Rating |
‘AA-’ by Fitch Ratings |
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Shariah advisor(s) |
First Abu Dhabi Bank’s Shariah supervisory committee |
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Tradability |
Yes |