Sunday 16, September 2018 by Jessica Combes

ADIB raises $750 million in UAE’s first tier-one perpetual Sukuk


The Sukuk is compliant with Basel III regulatory framework issued by the Central Bank of the UAE.

Abu Dhabi Islamic Bank (ADIB) has successfully raised $750 million of additional Tier 1 through a perpetual Sukuk that complies with Basel III regulatory framework issued by the Central Bank of the UAE.

ADIB, which is rated A2 by Moody’s and A+ by Fitch, in each case with a stable outlook, priced the non-call, five-year Sukuk at a profit rate of 7.13 per cent.

The issue was three times oversubscribed, accumulating $2.1 billion in orders. The issue was driven by broad demand across three regions, with final allocations of 69 per cent to MENA, 22 per cent to Europe, eight per cent to Asia and one per cent to other investors. By investor type, they were sold to private banks which took 34 per cent, commercial banks 31 per cent, asset and fund managers bought 28 per cent and others seven per cent.

The strong appetite from a broad range of international investors, particularly in current global capital market conditions, was testament to ADIB’s prudent financial management, and the bank’s prospects for further growth and development,” said Khamis Buharoon, ADIB’s acting Chief Executive Officer and Vice Chairman. “ADIB has grown to a major bank with over one million customers in the UAE, and we are investing in our digital and customer experience offering to maintain our competitive edge in the coming years. This Sukuk and our current share rights issue pave the way for future steady growth.”

The Sukuk issuance was part of a wider capital raising exercise, which includes raising equity through a AED 1 billion rights issue, with subscription running from 25 September to 9 October, and calling the existing Tier1 issue by 16 October 2018.

ADIB, HSBC and J.P. Morgan acted as joint global coordinators and structuring agents for the Sukuk, while ADIB, Citi, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, J.P. Morgan, Sharjah Islamic Bank and Standard Chartered Bank acted as joint lead managers and joint bookrunners.

The certificates will be issued by ADIB Capital Invest, a special purpose company, and be listed on the Irish Stock Exchange.

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