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DIB's $500m five-year sukuk heavily overbought

Dubai Islamic Bank said its $500 million (Dh1.83 billion) five-year sukuk due May 2017 has been four times oversubscribed.

  • Staff Report
  • Published: 00:00 May 24, 2012
  • Gulf News

Dubai: Dubai Islamic Bank said its $500 million (Dh1.83 billion) five-year sukuk due May 2017 has been four times oversubscribed.

The sukuk's pricing was announced on Tuesday under its newly established $2.5 billion 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 per cent with a spread of 365 bps over the five-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 programme. The order book was four 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 throughout the financial crisis. This has been evidenced by the maturity of our 2012 $750 million sukuk in March which was funded through our own resources."

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