Dubai (UAE): Dubai Islamic Bank (DIB) has announced the successful pricing of $1 billion sukuk (Islamic bond) issued with a 5 year tenor, maturing on February 6, 2023.
The issuance emanating from DIB’s $5 billion Sukuk Programme carries a profit rate of 3.625 per cent and is the first US dollar benchmark sukuk transaction from the GCC in 2018, once again reopening the regional financial institution and corporate debt capital markets, as was done a year earlier.
The deal clearly points towards the continued existence of the strong demand for DIB’s credit as well as the confidence which global investors have in the UAE’s largest Islamic bank.
This landmark RegS transaction was executed following investor meetings in Asia last year and a deal related roadshow in London on January 29, 2018. The issuance received 120 orders from a diverse investor base as part of a $1.83 billion order book indicating nearly 2 times oversubscription. The bank said the instrument will carry a dual listing on the Irish Stock Exchange and Nasdaq Dubai.
Initial price thoughts of mid-swap (MS) +130bps area were released at 09:00 AM UAE time on Tuesday January 30, 2018 to investors. The early guidance was further tightened following the strong demand generated for the transaction. With a final price guidance at MS+115bps, the issuance was subsequently priced at a profit rate of 3.625 per cent (MS+115bps spread), coming in at the tightest end of price guidance, representing solid demand for DIB’s paper.
The orderbook was driven by strong demand across the globe, including Middle East, Europe, Asia and North America, and across a broad spectrum of investors base, including banks, sovereign wealth funds, asset managers and other financial institutions to name a few.
“We are delighted with our successful return to the market with this landmark sukuk issuance of $1billion,” said Dr Adnan Chilwan (shown in pic), Group CEO DIB .
This is the second time DIB has raised a billion dollar senior sukuk in as many years effectively leading with the first deal of 2018 and re-opening the market in the GCC. Dr Chilwan said that the tremendous investor interest from across the globe is clearly exhibited by the strong and widespread subscription demonstrating not only the continued attraction of DIB as a quality credit, but also the resilience of the sukuk market in general.
Bank ABC, Dubai Islamic Bank, First Abu Dhabi Bank, HSBC, JPMorgan, KFH Capital, Sharjah Islamic Bank(SIB) and Standard Chartered Bank acted as joint lead managers and joint bookrunners while Union National Bank (UNB) and Boubyan Bank acted as co-managers on the offering.