Post by : Bianca
Haleem
Dubai Islamic Bank (DIB) has made a significant move in the Sukuk market by raising USD 1 billion through its inaugural Sustainability-Linked Sukuk. This five-year issuance comes with a profit rate of 4.572% per annum, underscoring the robust confidence investors have in the bank’s innovative approach to financing.
This Sukuk transitions from traditional use-of-proceeds to a performance-based framework, linking financing to verified sustainability goals. The proceeds will facilitate a variety of corporate projects committed to achieving pre-established sustainability KPIs, reflecting DIB’s commitment to responsible finance.
This issuance expands on DIB's earlier accomplishments, including the development of the Sustainability-Linked Finance Facilities Framework and previous Sustainable Sukuk offerings. The new setup aims to enhance Islamic sustainable finance by incorporating ESG principles and effective measurement into financing, ensuring it aligns with global standards.
Investor interest was notable, with the orderbook reaching USD 2 billion—double the issuance size. The participation predominantly came from the MENA region (67%), followed by Asia (20%), and the UK and Europe (13%). A substantial portion of the subscriptions was from banks and private banks, along with contributions from fund managers and institutional investors.
Promotional activities commenced on 10 November, focusing on the bank’s nine-month financial performance and sustainability pledges. The high level of investor interest led to final pricing tightening to 90 basis points over US Treasuries.
The Sukuk was issued under DIB’s USD 12.5 billion dual-listed Sukuk Programme available on Euronext Dublin and Nasdaq Dubai, with Standard Chartered Bank serving as the Sustainability Advisor. The transaction saw engagement from prominent regional and international banks, including Emirates NBD Capital, First Abu Dhabi Bank, and HSBC.
This deal highlights an increasing global demand for sustainability-linked Islamic finance instruments, marking a benchmark for future Sukuk structures aimed at impact-oriented results.
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