Dubai Islamic Bank (DIB), the biggest sharia-compliant lender in the UAE by assets, will start meeting fixed income investors in early February ahead of a potential sukuk issue.
The lender will meet investors in London on 6 February and could issue a benchmark fixed-rate US dollar-denominated sukuk. The benchmark usually refers to a transaction of $500m or more.
DIB, which is rated Baa1 by Moodys and A by Fitch, has mandated Bank ABC, DIB, Emirates NBD Capital, HSBC, KFH Capital, Maybank Investment Bank Berhad, National Bank of Abu Dhabi, Sharjah Islamic Bank and Standard Chartered Bank as joint lead managers and bookrunners for the transaction.
The lender had sent out request for proposals late last year and MEED on 19 January reported that DIB was close to selecting banks on the deal.
DIB 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 looking to tap 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 this February.