Dubai Islamic Bank successfully prices $1bn sustainable sukuk, its second so far

Dubai Islamic Bank successfully prices $1bn sustainable sukuk, its second so far

Dubai Islamic Bank (DIB) has successfully priced its second sustainable sukuk – a $1bn 5.5-year senior issue with a profit rate of 4.80 per cent per annum, representing a spread of 102.4 basis points (bps) over five-year US Treasuries. In November last year, DIB priced its inaugural sustainable sukuk, a $750m five-year senior issue with a profit rate of 5.493 per cent per annum, reflecting a spread of 155bps over five-year US Treasuries. The transaction marked the first-ever sustainable sukuk from a UAE financial institution and the largest issue size ($750m) in the international capital markets from a GCC bank since February 2022. The book was 2.3x oversubscribed. The sukuk was issued in line with DIB’s sustainable finance framework which was created to facilitate financing of green and social initiatives and projects. It 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 size ($1bn), the sukuk was 3x oversubscribed, which itself was the largest book size seen for a GCC bank in over a year. Dr Adnan Chilwan, group CEO, DIB, commented: “Driven by