Dubai Islamic Bank issued a $ 1 billion Sukuk with a five-year term, at a profit rate of 2.95% annually, which equals 245 basis points, in addition to the average return on five-year swap contracts.
The bank said in a statement yesterday that this issuance is an important achievement, as it represents the first public reference sukuk issued by a regional financial institution, after the market stopped due to the spread of the «Covid-19 virus», given that the latest issuance of the sukuk in the Gulf Cooperation Council countries It was completed in February 2020. The bank reopened the doors of the international Islamic capital markets to the financial institutions that issued sukuk in the UAE for the post-Coved-19 period.
The deal was priced after the completion of a global promotional campaign, which included many local, regional and international investors.
These sukuk attracted the attention of 170 major investment institutions, which confirmed their commitment to the UAE, and Dubai Islamic Bank in particular. The high appetite for these sukuk by international investors reflects the success of Dubai Islamic Bank in executing this transaction, with the underwriting record closing at more than $ 4.5 billion, close to 50% of it from outside the MENA region. “Despite global turmoil as a result of the pandemic (Covid-19), we are pleased with the high turnout by global investors, and the success of Dubai Islamic Bank in enhancing its attractiveness as a high-quality credit source in the market,” said Dr. Adnan Shalwan, CEO of Dubai Islamic Bank Group. The capital, with a coverage of about 4.5 times the subscription. ” “This deal clearly reflects the confidence that global markets place in the solid foundations of the bank, as well as the confidence of investors in the economy of Dubai and the UAE, as confirmed by investors’ appreciation of the economic measures taken by the UAE with a view to responding to the pandemic, ”he added. He explained that «the sukuk was issued in the form of a financial withdrawal, within the program of issuing credit certificates worth 7.5 billion dollars from Dubai Islamic Bank, which was listed on the stock exchange (Euronext Dublin) and (Nasdaq Dubai)».
ABC (Arab Banking Corporation), Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, HSBC Bank, ICBC Bank, Islamic Corporation for the Development of the Private Sector, Inc. KFH Capital, Sharjah Islamic Bank, and Standard Chartered Bank, to act as the co-lead issuers and co-subscription managers of the new issue.
The issuance represents the first general reference sukuk, issued by a regional financial institution, after the market halted as a result of “Covid-19”.