Dubai Islamic Bank (DIB) has successfully secured a $1 billion extended 5-year Sukuk with a profit rate of 2.95% per annum, which is comparable to 245bps over the equal tenor Mid Swap Rate.
DIB’s $1 billion Sukuk is a milestone event as it is the first public benchmark Sukuk from a regional financial institution after the COVID-19 market disorder with the last Sukuk issuance from GCC being conducted in February 2020. As a leading bank, DIB has in effect reopened the international Islamic capital markets for FI issuers from the UAE in the post-COVID-19 environment.
The transaction was priced intraday after performing a global investor call, which was attended by several local, regional and international investors. The Sukuk drew more than 170 high-quality investors reaffirming their dedication to UAE and DIB in particular. The success of DIB’s offering can be assessed by the strong international interest in the Sukuk as the order book rose to over USD 4.5 billion with nearly 50% originating from outside MENA.
“Despite the challenging global environment due to the COVID-19 pandemic, we are grateful for the positive response from the global investor community. With the issuance being subscribed nearly 4.5 times, DIB continues to remain an attractive credit in the capital market space. This transaction is a clear testament to the confidence the global markets place in the bank’s robust fundamentals, as well as investor comfort in the broader Dubai and UAE economy. It also clearly points towards investors’ appreciation of the economic measures and policy response of the UAE towards the pandemic.”
The Sukuk was issued as a drawdown under DIB’s $7.5 billion Trust Certificate Issuance Programme which is registered on Euronext Dublin and NASDAQ Dubai.
Bank ABC, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, ICBC, The Islamic Corporation for the Development of the Private Sector, KFH Capital, Sharjah Islamic Bank and Standard Chartered Bank served as Joint Lead Managers and Bookrunners on this transaction.