Dubai Islamic Bank Issues $500 Million AT1 Sukuk at Record Low Yield of 5.25%

Dubai Islamic Bank (DIB) successfully issued a US$500 million Additional Tier 1 Sukuk with a profit rate of 5.25 percent per annum.

The Basel III-compliant Sukuk will strengthen DIB’s capital adequacy ratio and optimise its balance sheet.

DIB’s broad and loyal investor following comprised of banks, private banks and fund managers from Europe, Asia and the Middle East.

The transaction, which was executed intra-day, managed to achieve a reset spread of 133.4 bps over the US Treasury rate, which is the lowest for an AT1 instrument globally since the 2009 financial crisis.

DIB’s robust credit fundamentals and the UAE’s positive credit story generated high interest from investors. The strong orderbook allowed DIB to tighten pricing to 5.25 percent from Initial Price Thoughts of 5.75 percent that were released earlier in the morning.

Dr. Adnan Chilwan, Group Chief Executive Officer, said,

“DIB is very pleased with this successful execution in the international capital markets space. The transaction represents the lowest yield achieved by an Emerging Markets Bank since April 2022. The deal highlights the confidence placed by international and regional investors in the bank’s strategy and credit story and also showcases the large investor following that the UAE enjoys. I am grateful to both our regular and new investors for their continuous support and remain steadfast in delivering on our commitments to the market.”

DIB is rated A3 Stable by Moody’s and A Stable by Fitch, and the Sukuk will be dual listed on Euronext Dublin and NASDAQ Dubai.

News Source: Emirates News Agency