Dubai Islamic Bank Secures $1 Billion Through Groundbreaking Sustainability Sukuk

Dubai Islamic Bank (DIB) has made a significant move in the international Sukuk arena, successfully raising USD 1 billion with its inaugural Sustainability-Linked Sukuk. This five-year issuance features a profit rate of 4.572% per annum, showcasing the strong trust investors place in the bank's innovative financing model.

This Sukuk introduces a transformative approach, shifting from traditional use-of-proceeds models to a performance-oriented framework that links funding to specific sustainability objectives. The capital generated will fund various corporate initiatives that meet established sustainability KPIs, highlighting DIB's commitment to responsible finance.

This latest issuance builds on DIB's prior successes, including the creation of the Sustainability-Linked Finance Facilities Framework and previous Sustainable Sukuk initiatives. This novel structure enhances Islamic sustainable finance by integrating ESG principles and outcome assessment within its funding strategy, aligning with international best practices.

Investor enthusiasm was high, as evidenced by an orderbook that reached USD 2 billion, effectively double the size of the issuance. Geographically, 67% of allocations went to the MENA region, with 20% allocated to Asia and the remaining 13% to the UK and Europe. The majority of subscriptions were from banks and private banks, with significant participation from fund managers and institutional investors.

Starting marketing efforts on November 10, the bank showcased its nine-month financial performance while emphasizing its sustainability initiatives. This strong interest led to tighter final pricing at 90 basis points over US Treasuries.

The Sukuk was issued under DIB's USD 12.5 billion dual-listed Sukuk Programme on Euronext Dublin and Nasdaq Dubai, with Standard Chartered Bank serving as the Sustainability Advisor. Notable regional and global banks, including Emirates NBD Capital, First Abu Dhabi Bank, and HSBC, played key roles in this transaction.

This deal highlights the increasing global demand for Islamic finance products tied to sustainability, paving the way for future Sukuk innovations aimed at impactful outcomes.