Post by : Badri Ariffin

Dubai Islamic Bank (DIB) has made significant strides in the international Sukuk arena by raising USD 1 billion via its inaugural Sustainability-Linked Sukuk. This five-year issuance offers a profit rate of 4.572% annually, showcasing robust investor confidence in DIB’s forward-thinking financing model.

This Sukuk shifts from the traditional use-of-proceeds framework to a performance-linked mechanism, which aligns financing with clear sustainability objectives. The funds acquired will facilitate a variety of corporate ventures committed to achieving agreed-upon sustainability KPIs, highlighting DIB’s commitment to ethical finance.

This issuance further advances DIB’s pioneering efforts, following its establishment of the Sustainability-Linked Finance Facilities Framework and its prior Sustainable Sukuk issues. The new format promotes Islamic sustainable finance by integrating ESG principles and impact measurement into financial transactions, ensuring compliance with international best practices.

Investor interest was unprecedented, with the orderbook peaking at USD 2 billion—twice the size of the issuance. Participation was diverse, spanning Europe, Asia, and the Middle East, with 67% allocated to the MENA region, 20% to Asia, and the remaining 13% to UK and European markets. Major subscriptions came from banks and private banking entities, alongside contributions from fund managers and institutional investors.

Marketing initiatives commenced on 10 November, focusing on the bank’s nine-month financial report and promoting its sustainability goals. This high-level investor interest enabled a tightening of the final pricing to 90 basis points over 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 drew participation from top regional and global banks, including Emirates NBD Capital, First Abu Dhabi Bank, HSBC, and more.

This deal highlights the increasing global interest in sustainability-linked Islamic finance instruments, establishing a benchmark for future Sukuk initiatives aimed at impact-driven results.

#Global News