Dubai Islamic Financial institution (DIB), the world’s first Islamic financial institution and the biggest within the UAE, has efficiently issued its debut Sustainability-Linked Financing Sukuk. The $1billion issuance, which has a five-year tenor and is priced at a revenue fee of 4.572% every year, marks a major evolution in Islamic sustainable finance.
The issuance strikes past conventional use-of-proceeds fashions to a performance-linked construction, tying influence on to measurable, independently verified sustainability targets, and supporting the UAE’s Internet Zero 2050 Initiative.
Robust investor demand for performance-linked finance
The Sukuk noticed exceptionally robust world curiosity, being greater than 2 instances oversubscribed with the orderbook peaking at $2billion. Over 80 institutional accounts from Europe, Asia, and the Center East participated.
Key allocation highlights embody:
- MENA Area: Obtained 67% of the Sukuk allocation.
- Asia: Accounted for 20%, marking the best Asian allocation ever achieved in a public Sukuk issuance by DIB.
- Investor Sort: 77% was allotted to banks and personal banks, 17% to fund managers, and 6% to insurance coverage corporations, pension funds, and sovereign wealth funds.
The robust market reception allowed the ultimate pricing to tighten to 90 foundation factors over US Treasuries, down from the Preliminary Worth Ideas of 120 foundation factors.
Advancing Islamic sustainable finance
This new Sustainability-Linked Financing Sukuk (SLFS) will channel investor capital right into a diversified portfolio of basic company objective sustainability-linked financing. This financing can be prolonged to purchasers dedicated to reaching measurable, pre-agreed sustainability Key Efficiency Indicators (KPIs).
Dr. Adnan Chilwan, group chief govt officer of DIB, emphasised the financial institution’s management position: “Because the world’s first Islamic financial institution, our accountability has all the time prolonged past providing compliant buildings. It’s to steer with objective and to show how Islamic finance can ship measurable and accountable influence… This Sustainability-Linked Sukuk displays that development. It strikes us from intention to efficiency”.
The Sukuk is a drawdown below the DIB $12.5billion Sukuk Programme. The underlying Sustainability-Linked Financing Framework was absolutely assessed by Institutional Shareholder Companies (ISS), receiving a Second-Get together Opinion confirming its alignment with worldwide greatest practices.
