Dubai’s DIB prices $500m sukuk with lowest yield

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Dubai

Dubai Islamic Bank, the biggest Sharia-compliant lender in the UAE, secured $500 million from a Tier-1 sukuk issues, its second deal in six months, as it continues to build its financial buffers.

The perpetual non-call bond with a tenor of five-and-a-half years offers a 3.375 per cent profit rate per annum.

It is the lowest-ever pricing achieved by a GCC bank on an additional Tier-1 sukuk instrument, DIB said in a statement to the Dubai Financial Market, where its share trade.

In November, the lender priced its five-year $1 billion additional tier-1 sukuk with a 4.625 per cent profit rate per annum, which at time carried the lowest yield achieved by any bank globally.

The low price achieved by DIB, which is rated A3 by Moody’s Investors Service and A by Fitch Ratings, despite volatile credit markets, is a “testament to the bank’s strong credit profile”.

“Given that markets had been fairly volatile during the last several weeks on account of underlying US Treasury rates rising rapidly, successfully executing this issuance at the lowest-ever pricing … is an achievement.”—Agencies