Dubai Islamic Bank has made a significant mark in the global financial market with the successful pricing of its third sustainable sukuk. The sukuk is a landmark $1 billion 5-year senior issue with a profit rate of 5.243 percent per annum. It represents a spread of 95bps over 5-Year US Treasuries. Rated A3 by Moody’s and A by Fitch, Dubai Islamic Bank underscores its commitment to integrating sustainability principles into its financing activities.
Sustainable finance framework
The sukuk issuance falls in line with Dubai Islamic Bank’s Sustainable Finance Framework. This framework aims to facilitate the financing of green, social initiatives and other environmental, social, and corporate governance (ESG) projects.
Pricing on the deal reflects the lowest-ever credit spread Dubai Islamic Bank has achieved. Moreover, it makes the bank one of the select few Middle East financial institutions to remain inside UST +100bps for a senior issuance. Moreover, the $1 billion issuance marks the largest sustainable issuance by a Middle East financial institution in nearly a year.
Dr. Adnan Chilwan, group CEO at Dubai Islamic Bank, commented, “We are delighted to announce the successful issuance of our third Sustainable sukuk today. This achievement affirms our steadfast commitment to ESG which aligns with the UAE’s Net Zero agenda and the Dubai Clean Energy Strategy.”
Investor confidence
Dubai Islamic Bank’s sustainable sukuk issuance demonstrates its leadership in Islamic sustainable finance. Moreover, the bank has established a strong investor following from Europe, Asia, and the Middle East, reflecting confidence in its financial performance and long-term ESG strategy.
Although Dubai Islamic Bank issued a larger sukuk, it achieved a 2.5x subscription. This indicates the strength of the bank’s financial and sustainability story which resonates with regional and global investor base.
“Despite the issuance in an extremely crowded market environment, we significantly accelerated the transaction execution given the overwhelming response with orders exceeding $2.5 billion. This enabled us to comfortably issue a larger size well within our pricing parameters,” Dr. Chilwan added.
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Key players
The sukuk is issued under DIB Sukuk Ltd and listed on Euronext Dublin and NASDAQ Dubai.
Standard Chartered Bank played a pivotal role as Sole Sustainability Structurer and Joint Lead Manager. Moreover, prominent institutions such as Al Rajhi Capital, Bank ABC and Dubai Islamic Bank served as Joint Lead Managers. Emirates NBD Capital, First Abu Dhabi Bank, HSBC, J.P. Morgan, KFH Capital, Mashreq, and Sharjah Islamic Bank also served as Joint Lead Managers. Their collaboration facilitated the successful execution of the Sukuk issuance, highlighting the collective effort towards advancing Islamic sustainable finance.
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