Dubai Islamic Bank (DIB) has successfully issued a $500 million Additional Tier 1 Sukuk, boasting a profit rate of 5.25 percent per annum.
This Basel III-compliant Sukuk is set to enhance DIB’s capital adequacy ratio while optimizing its balance sheet.
The issuance attracted a diverse and loyal investor base, including banks, private banks, and fund managers from Europe, Asia, and the Middle East.
Executed within a single day, the transaction achieved a reset spread of 133.4 basis points over the U.S. Treasury rate, marking the lowest spread for an AT1 instrument globally since the 2009 financial crisis.
Read more: National banks in the UAE invest $1.19 billion in local stock markets in 12 months: CBUAE
DIB’s strong credit fundamentals, coupled with the UAE’s positive credit outlook, sparked significant interest from investors. This robust demand enabled DIB to refine its pricing from the initial thoughts of 5.75 percent to the final rate of 5.25 percent.
Investor confidence
Dr. Adnan Chilwan, group chief executive officer, expressed his enthusiasm regarding the successful execution in the international capital markets. He noted that the transaction marked the lowest yield achieved by an Emerging Markets Bank since April 2022, emphasizing the confidence that both international and regional investors have in the bank’s strategy and creditworthiness. He also highlighted the significant investor interest attracted by the UAE. Additionally, he conveyed his gratitude to both loyal and new investors for their continued support and reaffirmed the bank’s commitment to fulfilling its promises to the market.
DIB holds an A3 Stable rating from Moody’s and an A Stable rating from Fitch. The Sukuk will be dual listed on Euronext Dublin and NASDAQ Dubai.
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