Dubai Islamic Bank successfully closes USD 750 million AT1 Perpetual Sukuk


The landmark issuance was subscribed nearly 5 times with around 40% interest generated from Asian and European investors

Dubai Islamic Bank PJSC (“DIB”), rated A3 by Moody’s (stable) and A by Fitch (stable), successfully closed a USD 750 million Additional Tier 1 (AT1) Perpetual Non-Call 6yrs Sukuk with a profit rate of 6.25% per annum, which is equivalent to 366.4bps over the implied 6-year US Treasury yield. The transaction, was only the second AT1 Sukuk under the new Basel III capital guidelines issued by the Central Bank of UAE (“CBUAE”) in 2018.  This was also the first hybrid capital issuance from the GCC in 2019.                 

The success of this transaction came on the back of an extensive marketing strategy aimed at updating international and regional investors with DIB’s strategy and continued strong financial performance. As a result, DIB achieved one of the largest and high quality orderbooks from a GCC bank in over a year at USD 3.7bn from 168 investors, representing a 4.9x oversubscription.  The investor base was well diversified with 62% of the Sukuk allocated to Middle East investors, 19% to UK/Europe, 18% to Asia and 1% to US offshore.

Dr. Adnan Chilwan, Group Chief Executive Officer of DIB, commented “We are very pleased with the success of this transaction and, in particular the confidence shown by international investors in the Bank’s performance and strategic direction.  The issuance attracted a diverse local, regional and international investor base, which helped us achieve the lowest possible pricing (6.25%) of any Basel III compliant AT1 instruments issued under the new capital guidelines from the UAE. With nearly 40% interest coming from outside of region, it is clear that our investor engagement strategy is on the right track and we will continue to maintain the open communication and level of transparency with the investor community from across the globe.”

Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, J.P. Morgan, KFH Capital, Sharjah Islamic Bank and Standard Chartered Bank acted as Joint Lead Managers and Joint Bookrunners on the Sukuk.