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Dubai Islamic Bank prices $1bn third sustainable bond

DUBAI, February 27, 2024

Dubai Islamic Bank has successfully priced its third sustainable sukuk – a landmark $1 billion 5-year senior issue with a profit rate of 5.243% per annum representing a spread of 95bps over 5-Year US Treasuries.
 
The sukuk was issued in line with DIB’s Sustainable Finance Framework which was created to facilitate financing of green, social initiatives and other ESG projects. 
 
Pricing on the deal reflects the lowest ever credit spread achieved by DIB and making the bank one of the select few Middle East Financial Institutions to remain inside UST +100bps for a Senior issuance. 
 
According to DIB, the $1 billion size is the largest sustainable issuance by a Middle East Financial Institution in nearly a year.
 
This deal once again demonstrated the bank’s leadership in Islamic Sustainable Finance, supported by an established and strong investor following from Europe, Asia and the Middle East. 
 
The sukuk was priced after completing a comprehensive marketing exercise with roadshows in Singapore and London, where DIB updated investors on its positive financial performance as well as its long term ESG strategy and plans. 
 
Despite issuing a larger size ($1 billion), DIB achieved a 2.5x subscription, a clear indication of how well the bank’s financial and sustainability story resonates with regional and global investor base.
 
On the key milestone, CEO Dr Adnan Chilwan said: "We are delighted to announce the successful issuance of our third sustainable sukuk today. This achievement affirms our steadfast commitment to ESG which aligns with the UAE’s Net Zero agenda and the Dubai Clean Energy Strategy."
 
"Despite the issuance in an extremely crowded market environment, we significantly accelerated the transaction execution given the overwhelming response with orders exceeding $2.5 billion," noted Chilwan. 
 
"This enabled us to comfortably issue a larger size well within our pricing parameters. I would like to extend my sincere appreciation to our investors for their continued trust and confidence," he added.
 
The bond is issued under DIB Sukuk and listed on Euronext Dublin and Nasdaq Dubai.
 
Standard Chartered Bank acted as Sole Sustainability Structurer and Joint Lead Manager, joined by Al Rajhi Capital, Bank ABC, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, J.P. Morgan, KFH Capital, Mashreq, and Sharjah Islamic Bank as Joint Lead Managers on the transaction.



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