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$1bn sukuk launched

DUBAI: Dubai Islamic Bank (DIB), the largest Sharia-compliant lender in the UAE by assets, launched a $1 billion hybrid sukuk yesterday.

The perpetual sukuk, which is aimed at shoring up its core or Tier 1 capital, launched at a profit rate of 6.25 per cent, in line with final guidance released earlier in the day.

The final guidance was substantially tighter than initial price talk of 7pc, after arranging banks said order books totalled $14bn, indicating massive demand for the deal.

HSBC Holdings, Standard Chartered, National Bank of Abu Dhabi, Emirates NBD and DIB itself are mandated lead arrangers for the deal.

DIB is the second Gulf bank to issue a hybrid perpetual sukuk, after Abu Dhabi Islamic Bank sold $1bn in a similar structure in November, attracting $15bn in orders.

DIB had a Tier 1 capital ratio of 13.9pc at the end of 2012, compared to 12.6pc in 2007.

The sukuk will be classified as deeply subordinated and is callable at year six. It will carry a fixed profit rate of six-year midswaps over the initial margin until first call.



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