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Dubai Islamic Bank’s Sukuk: A notable sustainable facility

Dubai Islamic Bank (DIB), the UAE’s largest Islamic bank by assets, successfully completed its third sustainable Sukuk offering. NESSREEN TAMANO writes.

The landmark paper worth US$1 billion, said to be the largest sustainable issuance from a financial institution in the Middle East in nearly a year, carries a five-year tenor and a profit rate of 5.24% per annum, representing a spread of 95bps over five-year US Treasuries (UST).

“Pricing on the deal reflects the lowest-ever credit spread achieved by DIB and making the bank one of the select few Middle East financial institutions to remain inside UST +100bps for a senior issuance,” the bank said.

The Sukuk garnered strong interest from investors in Europe, Asia and the Middle East, following roadshows in Singapore and London.

“Despite the issuance in an extremely crowded market environment, we significantly accelerated the transaction execution given the overwhelming response with orders exceeding US$2.5 billion,” said Dr Adnan Chilwan, group CEO of DIB.

“This enabled us to comfortably issue a larger size well within our pricing parameters.”

Standard Chartered Bank acted as the sole sustainability structurer of the Sukuk, which was issued in line with DIB’s sustainable finance framework designed to facilitate the financing of green, social initiatives and ESG projects.

Al Rajhi Capital, Bank ABC, DIB, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, JPMorgan, KFH Capital, Mashreq and Sharjah Islamic Bank joined Standard Chartered Bank as the mandated joint lead managers for the transaction.

This Sukuk issuance by DIB joins other, similarly notable, Islamic facilities launched by GCC issuers since the beginning of the year. These include offerings from Saudi banks Alinma Bank (a US$1 billion Islamic paper) and Saudi National Bank (a Sukuk issuance worth US$850 million).

Also from the corporate sector were issuances from the UAE’s Binghatti Holding (its inaugural US$300 million Sukuk), and from Saudi Arabia, Cenomi Centers (a US$500 million offering), and from Middle East Healthcare Company, which was a five-year Sukuk facility worth SAR1 billion (US$266.45 million).

Dubai Islamic Bank’s Sukuk

US$1 billion

27th February 2024
Summary of terms and conditions
DIB Sukuk
Dubai Islamic Bank (DIB)
Five years
Profit rate
5.24% per annum
Sole sustainability structurer
Standard Chartered Bank
Joint lead managers
Standard Chartered Bank; Al Rajhi Capital; Bank ABC; DIB; Emirates NBD Capital; First Abu Dhabi Bank; HSBC; JPMorgan; KFH Capital; Mashreq; Sharjah Islamic Bank
Euronext Dublin; NASDAQ Dubai

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