Signals robust credit profile
Dubai Islamic Bank , rated A3 by Moody’s and A by Fitch, has priced a $1 billion Additional Tier 1 Perpetual Non‑Call 6‑Year Sukuk at a profit rate of 6.250 percent, equivalent to a reset spread of 191.10 basis points over the interpolated U.S. Treasury rate. The transaction further demonstrates investor confidence in DIB’s credit fundamentals, resilient profitability and prudent capital management framework. Launched amid a challenging geopolitical backdrop, the issuance drew substantial interest from regional and international investors, reaffirming the bank’s credit strength and strategic market position. The public AT1 sale—one of the largest recent GCC AT1 issuances—reached $1 billion and reinforced DIB’s standing as a leading capital markets issuer.
Market reaction
Dr. Adnan Chilwan, Group Chief Executive Officer of DIB, said the strong result reflects the market’s continued confidence in the bank’s financial strength, disciplined capital strategy and ability to execute successful transactions under difficult conditions, and that the depth and quality of demand underline DIB’s reputation as a trusted global Sukuk issuer and the resilience of its credit profile. The orderbook peaked at over $2.3 billion, representing a 2.3x oversubscription, with participation from more than 85 institutional accounts across Europe, Asia and the Middle East. Geographically, 83 percent of the Sukuk was allocated to the MENA region and 17 percent to the U.K., Europe and other international investors. By investor type, 77 percent went to banks and private banks, 21 percent to fund managers and 2 percent to insurance companies, pension funds and sovereign wealth funds.
Execution timeline
Moreover, DIB began marketing the Sukuk on Monday, 8 June, via a series of investor calls to update stakeholders on its recent quarterly financial performance. The one‑day virtual marketing exercise proved efficient in a volatile market, minimising execution risk and time in the market. Positive reception further allowed the bank to open the orderbook on Tuesday, 9 June, with initial price thoughts around 6.625 percent. The book quickly grew to $1.7 billion at the U.K. open and then peaked at $2.3 billion, enabling pricing to tighten to a final profit rate of 6.250 percent.The Sukuk will be listed on Euronext Dublin and Nasdaq Dubai. Furthermore, Joint Lead Managers and Bookrunners on the transaction were Arqaam Capital, ASB Capital, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, KFH Capital, Mizuho, Sharjah Islamic Bank, Standard Chartered Bank and Warba Bank.
Source: economymiddleeast