Dubai Islamic Bank prices $1bn AT1 sukuk at 6.25% as orderbook tops $2.3bn
Dubai Islamic Bank priced a $1 billion AT1 sukuk at 6.25%, non-callable for six years, drawing robust demand and an orderbook peak of $2.3bn from global investors.
Dubai Islamic Bank prices $1bn AT1 sukuk
Dubai Islamic Bank has successfully priced a $1 billion perpetual additional Tier 1 (AT1) sukuk, the lender announced, underlining strong market confidence in its credit profile.
The issuance carries a fixed profit rate of 6.25% and cannot be called by the bank for six years, positioning it as a core component of the bank’s capital management strategy.
Terms and structure of the issuance
The AT1 sukuk was structured with a margin equivalent to 191.1 basis points over an interpolated US Treasury rate, reflecting prevailing market conditions for subordinated capital.
As a perpetual instrument that is non-callable for six years, the sukuk provides long-term capital relief while giving investors a yield consistent with additional tier one risk in global debt markets.
Investor demand and orderbook dynamics
Investor response exceeded expectations, with the orderbook swelling to more than $2.3 billion and representing coverage of roughly 2.3 times the size of the offer.
More than 85 institutional investors from Europe, Asia and the Middle East participated in the transaction, signaling cross-border appetite for Gulf bank capital instruments.
Geographic and investor-class distribution
Allocation favored regional buyers, with 83% of the sukuk placed with investors from the Middle East and North Africa and the remaining 17% distributed to the United Kingdom, Europe and other international markets.
By investor type, banks and private banks received the bulk of the issuance at 77%, while fund managers accounted for 21% and insurers, pension funds and sovereign wealth funds made up the remaining 2%.
Ratings and strategic capital management
The issuance was carried out while Dubai Islamic Bank holds investment-grade ratings of A3 from Moody’s and A from Fitch, underscoring the bank’s resilient credit fundamentals.
According to the bank, the transaction reflects disciplined capital planning and supports its ability to meet regulatory and strategic capital targets in an evolving macroeconomic environment.
Listings and regional market significance
Proceeds from the sukuk will be listed on both Euronext Dublin and Nasdaq Dubai, broadening the security’s access to European and regional trading pools.
Market participants noted that the dollar-denominated AT1 offering is one of the largest of its kind in the Gulf Cooperation Council in recent months, reinforcing the UAE’s role as a hub for Islamic capital markets.
Dubai Islamic Bank’s chief executive described the deal as evidence of sustained investor trust in the bank’s financial strength and governance, and said the quality of demand affirmed the bank’s standing in global sukuk markets.
The successful placement bolsters Dubai Islamic Bank’s capital base and provides a benchmark for future subordinated capital issuances in the region while offering investors a liquid, listed AT1 instrument with clear allocation across geographic and investor categories.