Emirates Islamic is First Bank in the UAE to Issue a Dirham Sukuk

2 Min | 09 February 2023

Emirates Islamic is first bank in the UAE to issue a Dirham Sukuk

Emirates Islamic successfully launches an AED 1 billion sukuk
The three-year sukuk carries a 5.05% profit rate, at a spread of 67 bps over UAE Government Treasuries
The dirham-denominated sukuk underscores robust demand for local currency issues

Dubai, 09 February 2023: Emirates Islamic, the Islamic subsidiary of Emirates NBD Group, has announced the successful pricing of its inaugural AED 1 billion dirham-denominated sukuk, the first such dirham sukuk issuance by a UAE bank. The Group’s sukuk sale will expand financing options for UAE corporations with Sharia’a-compliant needs while enhancing the development of the medium-term dirham yield curve.

The three-year issue witnessed robust demand and was oversubscribed 2.5 times. The strong order book, which exceeded AED 2.5 billion dirhams, allowed the bank to tighten the profit rate to 5.05%, at a spread of 67 basis points over UAE government treasuries.

The sukuk sale demonstrates Emirates Islamic’s commitment to deepening the liquidity of the local currency sukuk market following the creation of the Ministry of Finance’s medium-term dirham yield curve. The launch of the sukuk follows Emirate NBD’s AED 1 billion bond sale in January.

Salah Amin, Chief Executive Officer of Emirates Islamic said: “Emirates Islamic’s benchmark dirham sukuk further underscores the dirham bond market’s role as a significant and competitively priced source of funding for corporates. The robust demand is also a strong vote of confidence from global Sharia’a-compliant investors and demonstrates the strong appetite for dirham denominated fixed income products and services. Emirates Islamic is proud to play an important role in reinforcing the UAE’s position as the financial center of the region and supporting government initiatives.”

Mohammad Kamran Wajid, Deputy CEO of Emirates Islamic added: “Encouraged by the successful and heavily oversubscribed dirham bond issuance by Emirates NBD, Emirates Islamic has taken the opportunity to tap the market for an attractively priced dirham sukuk. The strong demand for the sukuk reflects the healthy appetite among Sharia’-compliant investors for a dirham-denominated issue. At the same time, the sukuk’s strict adherence to the latest Sharia’a-compliant standards has allowed us to tap a deep pool of global liquidity and attract a wide range of investors. This milestone sukuk is fully aligned to the UAE Government’s objective of developing the local debt market and the ‘Dubai: Capital of Islamic Economy Initiative’.”

Emirates NBD Capital was sole global coordinator, and Dubai Islamic Bank PJSC, First Abu Dhabi Bank PJSC and Standard Chartered Bank were joint lead managers and joint bookrunners for the sukuk.

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