This was also the first hybrid capital issuance from the GCC in 2019.
Wednesday 23, January 2019 BY WILLIAM MULLALLY
Dubai Islamic Bank PJSC (DIB), rated A3 by Moody's (stable) and A by Fitch (stable), successfully closed a $750 million Additional Tier 1 (AT1) Perpetual Non-Call 6 year Sukuk with a profit rate of 6.25 per cent 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 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 order books from a GCC bank in over a year at $3.7 billion from 168 investors, representing a 4.9x oversubscription. The investor base was well diversified with 62 per cent of the Sukuk allocated to Middle East investors, 19 per cent to UK/Europe, 18 per cent to Asia and one per cent to US offshore," said a statement from DIB.
“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 per cent) of any Basel III compliant AT1 instruments issued under the new capital guidelines from the UAE. With nearly 40 per cent 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," said Dr. Adnan Chilwan, Group Chief Executive Officer of DIB.
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.