Emirates Islamic, a prominent Islamic finance institution in the UAE and part of the Emirates NBD Group, has successfully issued a $500 million sustainability-linked sukuk.
This marks the world’s first sustainability-linked financing sukuk, generating an impressive $1.2 billion in demand and being oversubscribed 2.4 times.
The issuance attracted diverse interest: 10% from European institutions, 5% from Asia, and 83% from the Middle East, highlighting global confidence in Emirates Islamic’s robust financial standing (Fitch A+) and its dedication to sustainable Islamic finance.
High demand enabled the bank to reduce the spread to 95 basis points above the 5-year US Treasuries, resulting in a 4.540% annual profit rate. Allocation included 75% to banks and private banks, 20% to fund managers, and 5% to investments/public funds/sovereign wealth funds.
Farid AlMulla, CEO of Emirates Islamic, stated: “We are proud of this sukuk’s success, reflecting international investors’ trust in Emirates Islamic’s financial performance and the UAE’s credit narrative. The new Sustainability-Linked Financing Sukuk Framework demonstrates our innovation and aligns with our long-term strategy.”
Mohammad Kamran Wajid, Deputy CEO of Emirates Islamic, added: “Our strong track record in the international sukuk market is reinforced by this transaction, enhancing our profile with fixed-income investors. We are delighted by the strong demand for this sustainability-linked issuance.”
Ebrahim Qayed, Head of Treasury and Markets at Emirates Islamic, noted: “The market’s response to our Sustainability-Linked Financing Sukuk has been exceptional. This successful issue, a global first, shows growing investor interest in Shariah-compliant sustainable finance from Emirates Islamic.”
Vijay Bains, Chief Sustainability Officer and Group Head of ESG at Emirates NBD, commented: “This landmark transaction underscores our pioneering role in sustainable finance, reflecting our commitment to sustainability while supporting the UAE’s Net Zero 2050 goal.”
The sukuk was issued under Emirates Islamic’s $4 billion sukuk programme, listed on Nasdaq Dubai and Euronext Dublin. Proceeds will finance various sustainability-linked projects, aligning with Emirates Islamic’s framework which has received a second-party opinion from ISS-Corporate, confirming its adherence to international best practices.
Emirates NBD Capital and Standard Chartered Bank served as joint sustainability advisors. The joint lead managers and bookrunners were Arab Banking Corporation (B.S.C), Citibank, Dubai Islamic Bank, Emirates NBD Capital, Mashreq, Sharjah Islamic Bank, and Standard Chartered Bank.
