Dubai-based Emirates Islamic Bank, which is owned by Emirates NBD, has set pricing on a five-year $500m sukuk (Islamic bond) at 350 basis points above the mid-swap rate, according to sources close to the deal.

The sukuk is being arranged by National Bank of Abu Dhabi (NBAD) and Emirates NBD Capital, and the UK’s HSBC, Standard Chartered and Royal Bank of Scotland.

Some traders expressed surprise at the low price on the deal compared to Dubai bonds trading in the secondary market. Dubai sovereign bonds are currently trading at around 450 basis point above mid-swaps.

Several other UAE banks are expected to try and tap the bond or sukuk markets over the next few months. Abu Dhabi-based First Gulf Bank has appointed the US’ Citigroup, NBAD, HSBC and Standard Chartered to arrange a $500m five-year sukuk issue that it will start offering to investors on 11 January.