Dubai Islamic Bank (DIB), the biggest sharia-compliant lender in the UAE by assets, said it has raised $1bn through the sale of a senior sukuk, the largest by a financial institution globally.
The five-year Islamic bond was issued under the banks $5bn sukuk programme. It offers a profit rate of 170 basis point over mid-swaps or 3.664 per cent to fixed income investors. DIB had initially guided the price in mid-swaps +185bps area, it said in a statement to Dubai Financial Market, where its shares are traded.
The paper was launched after investor meetings in London on 6 February and it received more than 120 orders from investor. The order booked reached the total size of $2.2bn, the bank said, adding that the debt instrument will be dual listed on the Irish Stock Exchange and Nasdaq Dubai.
DIB, which is rated Baa1 by Moodys and A by Fitch, had mandated Bank ABC, DIB, Emirates NBD Capital, HSBC, KFH Capital, Maybank Investment Bank, National Bank of Abu Dhabi, Sharjah Islamic Bank and Standard Chartered Bank as joint lead managers and bookrunners on the transaction.
It had last tapped the market with the sale of a $500m, five-year shariah-compliant bond in March 2016, which was part of a $2.5bn sukuk programme. The paper offered a 3.6 per cent profit rate to investors. The lender also has an outstanding $300m, maturing imminently.
The lender is the latest among GCC corporates and financial institutions that are tapping international debt market to shore up liquidity, which has been squeezed by lower oil prices.
Dubais sovereign wealth fund, Investment Corporation of Dubai, and the Bahrain-based Gulf International Bank raised funds in January. Kuwaits Warba Bank has appointed banks for Islamic bond issue and is expected to tap the market later in February.