AVN 68.55 Increased By ▲ 2.05 (3.08%)
BOP 8.95 Increased By ▲ 0.15 (1.7%)
CHCC 132.00 Increased By ▲ 0.50 (0.38%)
DCL 9.30 Increased By ▲ 0.05 (0.54%)
DGKC 104.29 Increased By ▲ 0.35 (0.34%)
EFERT 61.26 Decreased By ▼ -0.34 (-0.55%)
EPCL 44.79 Increased By ▲ 0.29 (0.65%)
FCCL 21.35 Increased By ▲ 0.74 (3.59%)
FFL 14.93 Increased By ▲ 0.68 (4.77%)
HASCOL 14.52 Increased By ▲ 0.44 (3.13%)
HBL 130.00 Increased By ▲ 0.11 (0.08%)
HUBC 79.40 Decreased By ▼ -0.23 (-0.29%)
HUMNL 6.98 Increased By ▲ 0.38 (5.76%)
JSCL 23.50 Increased By ▲ 0.40 (1.73%)
KAPCO 28.81 Increased By ▲ 0.61 (2.16%)
KEL 3.85 Increased By ▲ 0.14 (3.77%)
LOTCHEM 12.89 Increased By ▲ 0.16 (1.26%)
MLCF 39.22 Increased By ▲ 1.03 (2.7%)
OGDC 99.33 Decreased By ▼ -3.74 (-3.63%)
PAEL 32.82 Increased By ▲ 0.52 (1.61%)
PIBTL 12.30 Increased By ▲ 0.18 (1.49%)
PIOC 91.35 Increased By ▲ 1.06 (1.17%)
POWER 9.62 Increased By ▲ 0.14 (1.48%)
PPL 91.29 Decreased By ▼ -1.93 (-2.07%)
PSO 193.90 Decreased By ▼ -1.17 (-0.6%)
SNGP 42.21 Decreased By ▼ -0.97 (-2.25%)
STPL 14.10 Increased By ▲ 0.68 (5.07%)
TRG 56.91 Decreased By ▼ -0.47 (-0.82%)
UNITY 25.31 Increased By ▲ 1.93 (8.25%)
WTL 1.07 Increased By ▲ 0.05 (4.9%)
BR100 4,231 Decreased By ▼ -21.54 (-0.51%)
BR30 21,389 Decreased By ▼ -14.14 (-0.07%)
KSE100 40,807 Decreased By ▼ -223.94 (-0.55%)
KSE30 17,160 Decreased By ▼ -134.97 (-0.78%)
Business & Finance

Dubai Islamic Bank sells $1 billion in perpetual sukuk

  • Overall debt issuance from the Gulf so far this year has already surpassed last year's total, again topping $100 billion.
  • DIB began marketing the notes at around 5.25% earlier on Thursday and received over $5.5 billion in orders for the debt sale.
12 Nov 2020

DUBAI: Dubai Islamic Bank, the United Arab Emirates' largest Islamic lender, on Thursday sold $1 billion in Additional Tier 1 sukuk, or Islamic bonds, at 4.625%, a document from one of the banks arranging the deal showed.

Overall debt issuance from the Gulf so far this year has already surpassed last year's total, again topping $100 billion and setting a new record as borrowers - especially governments - seek to bolster their finances amid the coronavirus crisis and weak oil prices.

Several more debt sales are expected before year-end, banking sources said.

DIB began marketing the notes at around 5.25% earlier on Thursday and received over $5.5 billion in orders for the debt sale, the document showed.

"Very tight pricing, coupled with a 5-1/2-times oversubscription, indicates high interest from investors as they lack alternative shariah-compliant instruments, in which there has been a long mismatch between supply and demand," a fixed income strategist said.

Additional Tier 1 (AT1) bonds, the riskiest debt instruments banks can issue, are designed to be perpetual in nature, but lenders can call them after a specified period.

Other banks in the UAE, including First Abu Dhabi Bank, Emirates NBD and Commercial Bank of Dubai have also sold AT1 bonds this year as they seek to shore up their Tier 1 capital as they book higher loan loss provisions amid the coronavirus crisis.

The sukuk's first call date is in May 2026. The profit rate will reset in November 2026 based on a correlation with six-year US Treasury swaps and will reset every six years thereafter.

The deal was arranged by Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, Sharjah Islamic Bank, and Standard Chartered.