Dubai Islamic Bank (DIB), the largest Islamic lender in the UAE, successfully issued a $500 million Additional Tier 1 sukuk, marking a significant moment in the global Islamic finance sector. The offering, which attracted substantial interest from regional and international investors, was designed to enhance the bank’s capital adequacy under Basel III regulations. The sukuk comes with a 5.25% profit rate per annum, a competitive pricing compared to the initial guidance of 5.75%.
This issuance is noteworthy not only for its size but also for the spread it managed to achieve—133.4 basis points over the U.S. Treasury rate, one of the lowest spreads for an Additional Tier 1 sukuk since the financial crisis of 2009. The success of this issuance underscores the strong demand for Islamic financial products, driven by DIB’s robust credit fundamentals and the positive economic narrative surrounding the UAE.
