Dubai Islamic Bank Secures $1 Billion with Landmark Sustainability Sukuk

Post by : Bianca Suleiman

Dubai Islamic Bank (DIB) has made a remarkable entry into the global Sukuk market by raising USD 1 billion with its inaugural Sustainability-Linked Sukuk. This five-year issuance boasts a profit rate of 4.572% per annum, showcasing robust investor confidence in DIB's innovative financing approach.

This Sukuk departs from conventional use-of-proceeds methodologies, opting instead for a performance-linked framework that aligns financing with quantifiable sustainability objectives. The capital raised will back a variety of corporate ventures committed to achieving predetermined sustainability KPIs, reinforcing DIB's pledge to responsible finance.

Building on its previous accomplishments, including the creation of the Sustainability-Linked Finance Facilities Framework, this issuance enhances the Islamic sustainable finance sector by integrating ESG principles and impact measurement into its financing practices, ensuring compliance with global standards.

Investor enthusiasm was substantial, with the orderbook reaching USD 2 billion, effectively doubling the issuance size. Participants hailed from Europe, Asia, and the Middle East, with allocations of 67% to the MENA region, 20% to Asia, and 13% to the UK and Europe. The majority of subscriptions were made by banks and private banking institutions, followed by fund managers and institutional players.

Promotional efforts commenced on 10 November, emphasizing the bank's solid nine-month financial performance while highlighting its sustainability initiatives. The high caliber of investor interest allowed for final pricing adjustments to 90 basis points above US Treasuries.

This Sukuk is part of DIB's USD 12.5 billion dual-listed Sukuk Programme on Euronext Dublin and Nasdaq Dubai, with Standard Chartered Bank serving as the Sustainability Advisor. The transaction engaged numerous leading banks, both regional and international, including Emirates NBD Capital, First Abu Dhabi Bank, and HSBC among others.

This development indicates a heightened global interest in sustainability-linked Islamic finance instruments, establishing a new benchmark for future Sukuk structures with a focus on impactful results.