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Dubai Islamic Bank successfully closes lowest ever yielding AT1 Sukuk

November 16, 2020
islamic finance

DUBAI — Dubai Islamic Bank (DIB) has successfully priced a US$1 billion Perpetual Non-Call 5.5 years Additional Tier 1 Sukuk with a profit rate of 4.625 percent per annum.

This transaction carries the lowest ever yield achieved by any bank globally on an AT1 Sukuk issue and is the only AT1 Sukuk from the GCC in 2020.

Despite the turmoil witnessed in markets this year during the crisis, DIB's success in this landmark transaction is a testament to the bank’s strong credit profile and standing with international and regional investors.

It reaffirms the confidence of international investors not only in DIB but in Dubai and the UAE.

The deal was priced intraday after completing a global investor call, which was attended by several local, regional and international investors.

The Sukuk attracted more than 150 high-quality investors and the success of DIB’s offering can be gauged by the substantial international interest in the Sukuk as the order book peaked at $5.7 billion — representing a 5.7x subscription on the issue.

Dr. Adnan Chilwan, group chief executive officer of DIB, said that despite the challenging global environment due to the pandemic during which the market for hybrid capital issuances was shut for quite sometime, DIB created a record of the lowest-ever yield on an AT1 Sukuk by any bank globally.

'We are delighted at this achievement and grateful to the global investor community for their confidence in the bank and for the support that the global markets place in the bank’s robust fundamentals, as well as in the broader Dubai and UAE economy.'

The Sukuk is issued under DIB Tier 1 Sukuk (4) Ltd. and is listed on Euronext Dublin and NASDAQ Dubai.

Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, Sharjah Islamic Bank and Standard Chartered Bank acted as Joint Lead Managers and Bookrunners on this transaction.