ADIB raises $750m in a US dollar denominated AT1 perpetual sukuk

Abu Dhabi Islamic Bank (ADIB) announced on Wednesday that it has successfully raised $750 million 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 more than 9 times over-subscribed and final pricing 62.5 bps tighter than the initial pricing thoughts. Additionally, reset spread is 306 bps over US treasury yields, which is 121 bps lower than the previous AT1 sukuk issued by Abu Dhabi Islamic Bank 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 Abu Dhabi Islamic Bank’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 JP Morgan acted as joint lead managers and joint bookrunners.

Meanwhile Abu Dhabi Islamic Bank (ADIB) has been recognised with three prestigious awards at the Bonds & Sukuk Middle East Awards 2023 for its outstanding contributions to the finance sector.

The three categories of the awards include the Global Sovereign Sukuk Deal of the Year, Islamic Syndication of the Year, and Real Estate Finance Deal of the Year.

Mohammed Ali Al Fahim, Acting Global Head of Wholesale Banking at Abu Dhabi Islamic Bank, said, “These awards reaffirm Abu Dhabi Islamic Bank’s position as a leading Islamic financial institution, dedicated to driving innovation and creating value for its clients.”

“Abu Dhabi Islamic Bank will continue to strive for excellence as we participate in ambitious deals that have a meaningful impact on the local communities they serve,” Ali Al Fahim added.

Abu Dhabi Islamic Bank received the Islamic Syndication of the Year award for its exceptional involvement. This milestone highlights ADIB’s leadership in structuring innovative and sustainable financial solutions.

In addition, ADIB has been honoured with the Real Estate Finance Deal of the Year award, which exemplifies Abu Dhabi Islamic Bank’s expertise in the real estate sector and its commitment to supporting significant projects.

Meanwhile Abu Dhabi Islamic Bank has signed a Memorandum of Understanding (MoU) with the Abu Dhabi Investment Office (ADIO) to provide support for domestic enterprises and investors in their financing and banking activities.