Dubai: Dubai Islamic Bank (DIB) announced that it has successfully accessed the international Sukuk market with a USD 1 billion Sustainability-Linked Sukuk, priced at a profit rate of 4.572% per annum with a tenor of five years. The issuance represents a significant milestone, marking the Bank's first Sukuk to be issued in a Sustainability-Linked format.
According to Emirates News Agency, this development builds on the Bank's earlier achievement of being the first Islamic institution to establish a Sustainability-Linked Finance Facilities Financing (SLFFF) Framework. The issuance highlights the Bank's commitment to innovative financial structures and sustainability, playing an important role in supporting the UAE's Net Zero 2050 Initiative.
Building on the success of its Sustainable Finance Framework (SFF) and prior Sustainable Sukuk issuances, DIB's latest offering, the Sustainability-Linked Financing Sukuk, represents an evolution from traditional use-of-proceeds models to performance-linked impact. This new structure advances Islamic sustainable finance by tying impact directly to measurable, independently verified performance targets. Through the new Sustainability-Linked Financing Sukuk (SLFS), the Bank will channel investor capital into a diversified portfolio of general corporate purpose sustainability-linked financing, extended to clients who have made firm commitments to achieve measurable, pre-agreed sustainability KPIs.
DIB continues to demonstrate a strong commitment to sustainability, embedding responsible finance and ESG principles at the core of its long-term strategy. The Sustainability-Linked Financing Framework underwent a comprehensive assessment and received a Second-Party Opinion from Institutional Shareholder Services (ISS), confirming its full alignment with international best practices and Sustainability-Linked Sukuk standards.
The deal attracted exceptionally strong interest, with the orderbook peaking at USD 2 billion and achieving an oversubscription of 2 times. More than 80 institutional accounts from Europe, Asia, and the Middle East participated in the Sukuk. The issuance drew robust global participation, with 67% of the Sukuk allocated to the MENA region and 20% to Asia, the highest Asian allocation ever achieved in a public Sukuk issuance by DIB. The remaining 13% was distributed among investors in the UK, Europe, and other international markets. In terms of investor type, 77% was allocated to banks and private banks, 17% to fund managers, and the remaining 6% to insurance companies, pension funds, and sovereign wealth funds.
DIB commenced marketing on Monday, 10 November with several investor calls to present its 9M' 25 financial performance. The two-day virtual marketing exercise proved highly efficient amid a crowded primary market environment, with several concurrent transactions. Investor reception was strongly positive, enabling the Bank to open the orderbook on Wednesday, 12 November with Initial Price Thoughts of 120 basis points over US Treasuries. The orderbook rapidly grew to USD 2 billion, allowing final pricing to tighten to 90 basis points over US Treasuries, equivalent to a profit rate of 4.572% per annum.
Dr. Adnan Chilwan, Group Chief Executive Officer of DIB, commented that this Sukuk issuance is a defining step in the bank's sustainability journey and a clear reflection of the strong confidence international investors continue to place in DIB, the UAE's solid credit fundamentals, and the strength of the bank's long-term strategy. He emphasized the responsibility of the world's first Islamic bank to lead with purpose and demonstrate how Islamic finance can deliver measurable and responsible impact that is transparent, independently assured, and aligned with national priorities.
The Sukuk was a drawdown under the DIB USD 12.5 billion Sukuk Programme, which is dual-listed on Euronext Dublin and Nasdaq Dubai stock exchanges, and is fully aligned with the Sustainability-Linked Financing Framework, with Standard Chartered Bank acting as Sustainability Advisor. The Joint Lead Managers and Bookrunners for this transaction were Standard Chartered Bank, Arqaam Capital, Bank ABC, DIB, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, ICBC, KFH Capital, KIB Invest, Maybank, QInvest, and Sharjah Islamic Bank.