Dr. Adnan Chilwan, Deputy Chief Executive Officer, DIB
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Dubai Islamic Bank (DIB, rated Baa1 by Moody's and A by Fitch) priced on Tuesday 22 May a highly successful US$ 500 million 5 year Sukuk due May 2017 under its newly established US$ 2,500,000,000 Sukuk Programme.
Deutsche Bank, DIB, Emirates NBD, HSBC and National Bank of Abu Dhabi acted as Joint-Lead Managers and Joint-Bookrunners, with Sharjah Islamic Bank and Union National Bank acting as Senior Co-Managers and Qatar Islamic Bank as Co-Manager. The transaction was priced at a profit rate of 4.752% with a spread of 365 bps over the US$ 5 year mid swaps.
Despite considerable volatility in the international market, DIB was able to take advantage of the resilience in the Sukuk space and the strong pent-up demand for quality issuers among Islamic investors, establishing a new benchmark rate for future issuances off their program. The order book was 4 times oversubscribed, a notable achievement in light of recent market issues.
“The success of this transaction for Dubai Islamic Bank is a reflection of the investor confidence and faith in our business model and franchise,” said Dr. Adnan Chilwan, Deputy Chief Executive Officer at DIB. “Dubai Islamic Bank has remained resilient and highly liquid through-out the financial crisis. This has been evidenced by the maturity of our 2012 US$ 750 million Sukuk in March which was funded through our own resources. The new issue is driven by the need to maintain a presence in the international debt capital markets and a prudent strategy to diversifying our funding sources.”
“We have successfully navigated very challenging market conditions, being the only Emerging Markets issuer in the US$ space globally this week, a testament to our credit profile and the successful execution by our Joint Lead Managers,” remarked Dr Adnan Chilwan
A successful marketing strategy was undertaken by DIB’s senior management team starting on Thursday 17 May through a series of fixed-income investor meetings in the key financial centres of Kuala Lumpur, Singapore, Abu Dhabi, Dubai and London.
DIB's credit story appealed to a high-quality investor base resulting in a well-diversified order book across geographies and investor types. The geographical distribution of the issue was as follows: 73% in the Middle East, 15% in Europe and 12% in Asia. Banks subscribed to 61% of the issue whilst the remaining distribution by Investor-type was Funds 24%, Private Banks 8%, and Sovereign and Supra National Agencies 7%.