Dubai Islamic Bank purchases outstanding trust certificates through cash tender offer
Purchases US$50.6 million of certificates at 88 per cent of face value
Transaction demonstrates continuing investor confidence and DIB’s strong liquidity position
Dubai Islamic Bank (DIB), the largest Islamic bank in the UAE, announced today that it has purchased US$50.6 million from the partial cash tender offer to retire US$200 million of outstanding sukuk certificates, which was announced in May 2009. DIB purchased the trust certificates at 88 per cent of the face value. The transaction was settled on May 21, 2009.
Through this transaction, DIB has become the first Islamic bank to purchase its outstanding trust certificates through a cash tender offer. The transaction also demonstrates DIB’s strong liquidity position and the bank’s healthy repayment capability and surplus funding. Demonstrating the continuing investor confidence in DIB, a significant percentage of investors have decided to hold the certificates. DIB is rated A1/A- by Moodys and S&P.
“This transaction is a testament of the market’s confidence in DIB’s future earning capabilities and its growth strategy,” Mohammed Saleem, Chief of Treasury at DIB, said. “Our investors have reiterated their comfort in their ongoing exposure to DIB, and this is a major validation of our financial strength and the franchise value.
“Taking into consideration recent market developments, DIB successfully established a competitive cash tender offer for the trust certificates, creating a favourable offer for investors as well as realising a net gain for DIB. The bank continues to be in a positive liquidity position and maintains sufficient funding to retire the facility earlier than maturity. This marks another successful transaction for DIB, and further validates our business strategy amidst challenging conditions.”
The five-year sukuk facility was launched in the first quarter of 2007 through its inaugural US$ 750million Sukuk Certificates. Barclays Capital, DIB Capital and Standard Chartered Bank acted as the lead managers for the cash tender offer.
