UAE: ADIB raises USD 750 million in US dollar-denominated tier-one perpetual sukuk

Abu Dhabi [UAE], July 12 (ANI/WAM): Abu Dhabi Islamic Bank (ADIB) announced today that it has successfully raised 750 million USD in the world’s first dollar-denominated additional tier-one (AT1) perpetual sukuk issued since March 2023.

ADIB, which is rated A2 by Moody’s and A+ by Fitch, in each case with a stable outlook, priced the perpetual non-call, five and half-year sukuk at a profit rate of 7.25 per cent per annum payable semi-annually. The new sukuk will be listed and traded on London Stock Exchange.

The issuance was met with exceptional demand, attracting interest from over 240 global and regional investors with the final order exceeding 7 billion USD more than 9 times over-subscribed and final pricing 62.5 bps tighter than the initial pricing thoughts. Additionally, the reset spread is 306 bps over US treasury yields, which is 121 bps lower than the previous AT1 sukuk issued by ADIB in 2018.

"We are pleased to see this strong international demand continue as the final pricing tightened. The sukuk issuance will maintain the Group’s optimised capital structure and its strong CET1 position. The overall success of this raise can be attributed to ADIB's clear ESG framework and our strong track record of both growing market share and delivering sustainable returns,” said Nasser Al Awadhi, ADIB Group Chief Executive Officer.

The issuance was driven by broad demand across three regions, with final allocations of 83 per cent to MENA, 13 per cent to Europe 4 per cent to Asia, by investor type, private banks 70 per cent, Asset and Fund managers 16 per cent, commercial banks 10 per cent and others 4 per cent.

The sukuk issuance will maintain the Group’s optimised capital structure and its strong CET1 position. ADIB’s tier-one perpetual sukuk was structured to comply with the internationally agreed Basel III regulatory framework, which includes detailed criteria for capital and liquidity.

HSBC and Standard Chartered Bank acted as joint global coordinators and structuring agents for the sukuk, while ADIB, Citi, Emirates NBD Capital, First Abu Dhabi Bank, and J.P. Morgan acted as joint lead managers and joint bookrunners. (ANI/WAM)