RIYADH: Abu Dhabi Islamic Bank has raised $500 million through a green sukuk offering, making it the world’s first such US dollar-denominated Islamic bond issued by a financial institution.
According to a statement, ADIB priced the five-year senior sukuk at a profit rate of 5.69 percent per annum, payable twice a year. The new sukuk will be listed and traded on the London Stock Exchange’s International Securities Market and the Sustainable Bond Market.
This move comes amid high demand from the Middle East and Africa, which was allocated 78 percent, followed by 13 percent to Europe and 9 percent to Asia and the US.
In terms of investor type, private banks stood at 26 percent of the allocation, followed by asset and fund managers at 17 percent, commercial banks at 42 percent and others at 16 percent.
“We are thrilled to be the first financial institution in the world to issue the first USD-denominated green Sukuk, which builds on ADIB’s efforts to address climate change and to advance sustainable solutions that protect the environment and help facilitate a transition to a low-carbon economy,” ADIB Group CEO Nasser Al-Awadhi said.
“This is an important step in our sustainability journey and will further expand the bank’s role in catalyzing capital to address the pressing environmental and social issues facing society today,” Al-Awadhi added.
He continued that the bank has received interest from a broad range of local, regional, and global investors, cementing the demand and confidence in ADIB’s asset quality.
This comes as the issuance attracted interest from over 100 international and local investors, with the final order book closing at $2.6 billion, representing an oversubscription rate of 5.2 times.
This has tightened the final price guidance meaningfully by 30 to 115 basis points over the five-year US Treasury rate.
Moreover, ADIB intends to allocate an amount equal to the net proceeds of this issuance to fund eligible green projects to accelerate and propel climate transition.
This may include the financing or refinancing of green projects and funding customers for eligible green projects as described under the Eligibility Criteria in the ADIB Sustainable Finance Framework.
ADIB’s vision is to be a leading universal bank that is fully Shariah compliant, focusing on service excellence and product and solution innovation.
