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Dubai Islamic Bank (DIB), rated A3 by Moody’s and A by Fitch, has successfully priced its second sustainable sukuk – a US$1 billion 5.5-year senior bond with an annual yield of 4.8%, on par with the U.S. The 5-year bond spread was 102.4 basis points over T-bills.
The Sukuk is issued under DIB’s Sustainable Finance Framework, which aims to facilitate the financing of green and social initiatives and projects.
The transaction achieved multiple milestones, including the largest bond issuance by a Middle Eastern financial institution in international capital markets since June 2021, and the largest ever sustainable bond issuance by a Middle Eastern financial institution.
strong investor following
The transaction reaffirms DIB’s leadership in Islamic and sustainable finance, attracting sophisticated and strong investors from Europe, Asia and the Middle East. The sukuk was priced following the completion of a comprehensive marketing campaign and DIB updated investors on its positive financial performance and sustainable finance framework. Investor response was overwhelming, and despite the larger issue ($1 billion), DIB was 3x oversubscribed – itself the largest book size for a GCC bank in over a year.
Dr Adnan Chilwan, Group Chief Executive, DIB, commented: “In line with our carefully crafted balanced growth strategy and the Bank’s drive towards the UAE’s sustainable development agenda and the country’s larger ‘Net Zero by 2050’ goal, we are delighted to announce Launching our second sustainable sukuk today, the largest ever for a Middle Eastern financial institution. The success of DIB’s first sukuk issue in 2022 is a strong reflection of market confidence in the franchise and the bank’s strong presence locally and The reputation enjoyed in the international capital market.
“Investor response to this latest offering has been overwhelming, with an order book in excess of $3 billion enabling us to issue a larger offering within our pricing parameters. I would like to thank our investors for their continued confidence in DIB and Confidence. As the country prepares to host COP 28, we remain committed to playing an active role in achieving the UAE’s long-term sustainability goals. We hope the success of our launch will encourage other issuers in the UAE to follow suit in this format.”
Sukuk is issued under DIB Sukuk Ltd and listed on Euronext Dublin and Nasdaq Dubai. — trade arab news agency
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