Abu Dhabi Islamic Bank (ADIB) raises $500M with Sharia-compliant green bonds, advancing sustainability efforts and diversifying funding sources.
ADIB priced the senior sukuk with a five-year tenure at a profit rate of 5.695% per annum, payable semi-annually. The Abu Dhabi-based lender stated that the sukuk will be listed and traded on the London Stock Exchange’s International Securities Market and Sustainable Bond Market.
High Demand: ADIB’s Green Sukuk Oversubscribed 5.2 Times
Strong interest from over 100 investors worldwide and in the region resulted in the order book being oversubscribed by 5.2 times, ultimately closing at $2.6 billion.
The bank plans to allocate the net proceeds from this issuance to support green projects aimed at accelerating the transition to a more sustainable environment, according to The National News.
These initiatives will encompass financing or refinancing green projects and offering financial support to customers undertaking eligible green projects as defined in the ADIB Sustainable Finance Framework.
Nasser Al Awadhi, ADIB’s group chief executive, emphasized the importance of this step in their sustainability journey and its role in channelling capital to address pressing environmental and social issues.
The success of the sukuk issuance stems from ADIB’s robust Environmental, Social, and Governance (ESG) framework and its history of achieving market share growth and sustainable returns.
ADIB Receives Strong Investor Response with Global Sukuk Issuance
Moody’s rates ADIB as A2, and Fitch as A+ with a stable outlook. Investors from three regions showed strong demand for the issuance, resulting in final allocations of 78% for the Middle East and North Africa, 13% for Europe, and 9% for Asia and the US.
By investor type, private banks subscribed to 26% of the total allocation, while asset and fund managers made up 17%, commercial banks 42%, and other investors 16%.
Standard Chartered Bank served as the global coordinator and sustainability structuring agent for the deal, while ADIB, Emirates NBD, First Abu Dhabi Bank, and Sharjah Islamic Bank actively served as joint lead managers and bookrunners.
This move follows ADIB’s successful $750M issuance of Sharia-compliant bonds in July. In October, the bank reported a 41% year-on-year increase in its third-quarter net profit to AED 1.42B ($386M). Gross revenue from funds for the period also surged by 89% year-on-year to AED 2.4B, while investment income increased by 35% to AED 246M.
