DIB’s $500m sukuk draws big response
Dubai, May 23, 2012
Dubai Islamic Bank (DIB) yesterday (May 22) priced a $500 million five-year sukuk, which was oversubscribed four times. The pricing was done under bank’s 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 $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 programme.
“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 $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 dollar space globally this week, a testament to our credit profile and the successful execution by our joint lead managers,” added Dr Chilwan.
A successful marketing strategy was undertaken by DIB’s senior management team starting on May 17 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 per cent in the Middle East, 15 per cent in Europe and 12 per cent in Asia. Banks subscribed to 61 per cent of the issue whilst the remaining distribution by investor-type was funds 24 per cent, private banks 8 per cent, and sovereign and supra national agencies 7 per cent. – TradeArabia News Service