Abu Dhabi Islamic Bank (ADIB), a leading financial institution, announced today 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 percent 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 ADIB in 2018.
"We are delighted to receive exceptional interest from a broad range of domestic , regional and international investors, with ADIB's recent achievement of raising $750 million tier-one perpetual sukuk. Demand for this issuance exceeded the initial offer by more than nine times, highlighting the tremendous demand and confidence from global investors in ADIB's asset quality," remarked Group CEO Nasser Al Awadhi.
"We are also pleased to see this strong international demand continue as the final pricing tightened. The sukuk issuance will maintain the Group’s optimized capital structure and its strong CET1 position," noted Al Awadhi.
"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," he added.
The issuance was driven by broad demand across three regions, with final allocations of 83% to Mena, 13% to Europe 4% to Asia,. By investor type, private banks 70%, Asset and Fund managers 16%, commercial banks 10% and others 4%.
According to ADIB, the sukuk issuance will maintain the group’s optimized capital structure and its strong CET1 position.
The bank’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.-TradeArabia News Service
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