Dubai Islamic Bank (DIB), the UAE’s largest Islamic lender, has successfully raised $1 billion through an Additional Tier 1 (AT1) perpetual sukuk, underscoring strong investor confidence in the bank and the resilience of Gulf capital markets despite ongoing geopolitical and market uncertainties.
The sukuk, structured as a perpetual non-call six-year instrument, was priced at a profit rate of 6.25 per cent, equivalent to a reset spread of 191.1 basis points over the interpolated US Treasury rate. The transaction ranks among the largest AT1 issuances in the GCC in recent years and highlights the continued appetite for Shariah-compliant investments.
The issuance attracted orders exceeding $2.3 billion from more than 85 institutional investors, resulting in an oversubscription rate of 2.3 times. Strong demand enabled the bank to tighten pricing from the initial guidance of around 6.625 per cent to the final rate of 6.25 per cent.
Dr. Adnan Chilwan, group chief executive officer of DIB, said the transaction demonstrated investors’ confidence in the bank’s financial strength, disciplined capital strategy and ability to execute successfully even in challenging market conditions.
“The strong outcome of this issuance reflects the market’s continued confidence in DIB’s financial strength, disciplined capital strategy and ability to deliver successful transactions even in challenging conditions,” Dr. Chilwan said.
He said the depth and quality of investor demand reaffirmed DIB’s standing as a trusted issuer in the global sukuk market and underscored the resilience of its credit profile.
The successful fundraising comes at a time when global debt markets are navigating heightened volatility triggered by geopolitical tensions, fluctuating interest-rate expectations and concerns over global economic growth.
DIB, which is rated A3 by Moody’s and A by Fitch Ratings, launched a series of investor calls on June 8 to update investors on its financial performance and growth strategy. The bank opened the order book the following day, with demand quickly surpassing $1.7 billion before peaking at more than $2.3 billion.
Investors from the Middle East and North Africa accounted for 83 per cent of allocations, while 17 per cent went to investors from the UK, Europe and other international markets. By investor type, banks and private banks received 77 per cent of the allocation, followed by fund managers at 21 per cent and insurance companies, pension funds and sovereign wealth funds at 2 per cent.
Market participants said the strong participation from dedicated Islamic investors reflected both the depth of liquidity in the sukuk market and DIB’s reputation as one of the region’s most established issuers.
The sukuk will be listed on both Euronext Dublin and Nasdaq Dubai, enhancing its visibility among international investors.
The transaction was arranged by a syndicate of regional and international banks, including Emirates NBD Capital, First Abu Dhabi Bank, HSBC, Standard Chartered Bank, KFH Capital, Mizuho and Sharjah Islamic Bank, among others.
The successful issuance is expected to further strengthen DIB’s capital base and support its growth ambitions while reinforcing Dubai’s position as a leading global hub for Islamic finance.
