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DIB Successfully Priced Its Second Sustainable Sukuk | |
| Sumita Pawar |
A report says Dubai Islamic Bank (DIB) has successfully priced its second sustainable sukuk, a landmark US$1 billion 5.5-year senior issue with a profit rate of 4.80 percent per annum, representing a spread of 102.4 basis points over 5-year US Treasury notes.
The Sukuk was issued based on DIB's Sustainable Finance Framework, which was made to make it easier to get money for green and social projects and initiatives.
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This deal achieved several landmarks, including the largest issuance by a Middle East financial institution in the international capital markets since June 2021 and the largest-ever sustainable issuance by a Middle East financial institution.
report highlighted, this deal once again demonstrated DIB’s leadership in Islamic and sustainable finance, with an established and strong investor following from Europe, Asia, and the Middle East.
The Sukuk was priced after completing a comprehensive marketing exercise where DIB updated investors on its positive financial performance as well as its sustainable finance framework.
The response from investors was overwhelming, and despite issuing a larger amount (US$1 billion), DIB achieved a 3x oversubscription, which itself was the largest book size seen for a GCC bank in over a year.
Dr. Adnan Chilwan, Group Chief Executive Officer, DIB, commented, "Driven by our detailed and meticulously crafted balanced growth strategy as well as the bank’s commitment towards the sustainability agenda of the UAE and the larger "Net Zero by 2050" goal of the nation, we are delighted to announce the issuance of our second sustainable sukuk today, the largest-ever by a Middle East financial institution."
He said that the success of DIB's first sukuk in 2022 showed that the market had a lot of faith in the brand and that the bank had a good reputation in the local and international capital markets.
"The investor response for this latest issuance was overwhelming, with more than US$3bn of orders allowing us to issue a larger size well within our pricing parameters." I would like to thank our investors for the continued trust and confidence placed in DIB. As the country prepares to host COP 28, we remain committed to playing an active role in fulfilling the UAE’s long-term sustainability objectives.
"We hope the success of our offering will encourage other issuers from the UAE to follow suit in this format," he added.