Abu Dhabi Islamic Bank to issue Tier 1 capital Sukuk
On 04 February 2009, and in response to the Government of Abu Dhabi’s initiative to inject additional capital into certain Abu Dhabi financial institutions, Abu Dhabi Islamic Bank PJSC (ADIB) announced that it will issue Tier 1 capital sukuk to the Government of Abu Dhabi, with a principal amount of AED 2.0 billion (the "Sukuk"). The issuance of the Sukuk has been approved by ADIB’s board of directors on Tuesday 03 February, and will be subject to obtaining shareholder approval.
The Sukuk will pay an expected return at a rate of 6% per annum, payable semi-annually in arrear from (and including) the issue date for a period of five years, and thereafter at a rate, reset and payable semi-annually in arrear, reflecting the initial margin above the then prevailing six month Emirates Interbank Offered Rate. The Sukuk is non-voting, non-cumulative perpetual securities, and are callable subject to certain conditions.
Tirad Mahmoud, Chief Executive Officer of ADIB, commented: “We are firmly behind the Government's prudent plan to continue shoring up the local economy and, given that one of the principles of Sharia'a Law is acting in the public benefit, these sukuk will provide an ideal base on which to contribute to this plan."
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