DIB closes AT1 sukuk at lowest-ever yield

$1 bn issue priced at profit rate of 4.625 pc

Amit Chettupuzha

DUBAI/ November 14, 2020: Dubai Islamic Bank (DIB), the largest Islamic bank in the country, has successfully priced a $1 billion Perpetual Non-Call 5.5-year Additional Tier 1 sukuk with a profit rate of 4.625 per cent.

A statement from DIB, said 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.

Strong credit profile

The statement also noted that despite the turmoil witnessed in markets this year during the peak of the COVID-19 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.

Oversubscribed

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 5.7 multiples of subscription.

Dr Adnan Chilwan (seen in the picture), Group Chief Executive Officer, DIB, reminded that despite the challenging global environment due to the COVID-19 pandemic during which the market for hybrid capital issuances was shut for quite some time, 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,” Chilwan added.

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 (FAB), HSBC, Sharjah Islamic Bank (SIB) and Standard Chartered Bank acted as joint lead managers and book-runners on this transaction.

 

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