DIB strengthens its leadership position through the largest recent AT1 Sukuk offering, carrying a 6.25% profit rate.
Dubai: Dubai Islamic Bank (DIB), rated A3 by Moody’s and A by Fitch Ratings, has successfully priced a $1 billion Additional Tier 1 (AT1) Perpetual Non-Call 6-Year Sukuk at a profit rate of 6.250%, equivalent to a reset spread of 191.10 basis points over the interpolated U.S. Treasury rate.
The issuance underscores strong investor confidence in DIB’s solid credit fundamentals, resilient earnings profile, and disciplined capital management strategy. Despite a challenging geopolitical environment, the transaction attracted substantial demand from both regional and international investors, highlighting the bank’s strong credit standing and market position.
Through the offering, DIB raised $1 billion from the public AT1 market, representing one of the largest GCC AT1 Sukuk issuances in recent years and further cementing its position as a leading issuer in regional and international capital markets.
The strong response from dedicated Islamic investors reflects deep confidence in DIB’s credit profile and reinforces its position as a leading issuer among the global Sukuk investor community.
Dr. Adnan Chilwan, Group Chief Executive Officer of Dubai Islamic Bank (DIB), said:
“The strong outcome of this issuance reflects the market’s continued confidence in DIB’s financial strength, disciplined capital strategy, and ability to successfully execute transactions even amid challenging market conditions. The depth and quality of investor demand reaffirm the Bank’s position as a trusted issuer in the global Sukuk market and underscore the resilience of its credit profile.”
The transaction attracted robust investor interest, with the order book exceeding $2.3 billion at its peak, representing an oversubscription rate of 2.3 times. More than 85 institutional investors from Europe, Asia, and the Middle East participated in the Sukuk offering, highlighting DIB’s broad international investor appeal and strong market standing.
Investor demand was geographically diverse, with 83% of the Sukuk allocated to investors across the MENA region, while the remaining 17% was placed with investors from the UK, Europe, and other international markets.
By investor category, banks and private banks accounted for 77% of allocations, followed by fund managers at 21%, while insurance companies, pension funds, and sovereign wealth funds collectively represented 2% of the issuance.
DIB launched the marketing of the Sukuk on 8 June through a series of investor calls, providing updates on the Bank’s recent quarterly financial performance and strategic outlook. The strong response from investors culminated in a highly successful issuance, reflecting continued confidence in the Bank’s credit quality and growth prospects.
The Bank conducted a one-day virtual deal marketing exercise, which proved highly effective in a volatile market environment where minimizing execution risk and reducing time-to-market were key priorities.
Investor feedback was overwhelmingly positive, enabling DIB to formally launch the transaction and open the order book on 9 June with Initial Price Thoughts (IPTs) in the 6.625% area.
The strong early momentum from investors provided a solid foundation for the transaction, paving the way for significant orderbook growth and subsequent pricing optimization as demand continued to build throughout the offering process.
The order book gained momentum rapidly, reaching approximately $1.7 billion by the start of the UK trading session before peaking at more than $2.3 billion. The strong investor demand enabled DIB to tighten pricing by 37.5 basis points, resulting in a final profit rate of 6.250%.
The Sukuk is expected to be listed on Euronext Dublin and Nasdaq Dubai, enhancing its visibility and accessibility to a broad base of regional and international investors.
The transaction was jointly led by a syndicate of leading regional and international financial institutions acting as Joint Lead Managers and Bookrunners, including Arqaam Capital, ASB Capital, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, KFH Capital, Mizuho, Sharjah Islamic Bank, Standard Chartered, and Warba Bank.
Their collective expertise and distribution capabilities contributed significantly to the successful execution of the transaction and the strong level of investor participation across key global markets.
