DIB breaks another world record in Sukuks

This Sukuk adopted a 1st of its kind structure never used before in Islamic or conventional banking history.

The Nakheel Sukuk brings the total Sukuk raised by DIB in the UAE to more than US$9 billion (AED33 billion), an unprecedented amount in the history of Islamic Banking. The Nakheel Sukuk also completes a hat-trick of successes for DIB, following the US$1 billion Sukuk for Dubai Civil Aviation (DCA), and US$3.5 billion Sukuk for Ports, Customs and Free Zone Corporation (PCFC), among other major transactions in UAE and across the region. DIB is currently working on structuring further Sukuks and will announce details about these deals in the near future.

Saad Abdul Razak, CEO, said: "The Nakheel Sukuk brings the total Sukuk raised by DIB in the UAE to more than US$9 billion (AED33 billion). The figure accounts for almost 70% of all Capital Market (Sukuk and conventional bonds) funding for public sector entities in the Emirates in the last two years. DIB has been at the forefront of lead-managing Sukuks and we feel proud and honored in leading the Sukuk market and driving innovation in this segment."

"At DIB we strive to constantly innovate and structure products that benefit our major institutions in UAE and across the region . The Nakheel Sukuk's first of its kind equity-linked innovation has proved an extremely attractive proposition for a wide range of investors. The fact that investors from across the world participated in this Sukuk is a manifestation of Islamic financing instruments such as Sukuk gaining popularity," he added.

Mr. Saad noted: "The Nakheel Sukuk consolidates DIB's position as the world's number one Sukuk underwriter. According to a Bloomberg "Underwriter Rankings" report that was releases in mid-September, 2006, DIB has emerged as the global market leader with 20.8% market share."

"DIB's expertise in this sector puts the bank into a leading position in the field of Islamic Finance which is the world's fastest growing sector in the financial services industry. DIB is uniquely well-placed to take advantage of these developments due to our success in structuring and executing a variety of complex transactions which has encouraged other institutions to partner with DIB. Those deals exhibit DIB's ability to access diversified and flexible sources of financing which leads to competitive pricing and wider distribution. DIB has played a major role in channeling foreign investment to the local market, and in developing local projects," he concluded.

The US$2.5 billion Nakheel Sukuk which was enhanced by over US$1.02 billion, received an excellent response from investors around the world and collected a total of US$6 billion. The Nakheel Sukuk has been oversubscribed by 2.5 times of its original size making it the world's largest and it ranks amongst the top 10 convertible capital markets issues globally. The Sukuk is allocation is predominantly to European (40%) and Middle Eastern (38%) investors, balance to other parts of the world. Broad distribution to different investor classes includes banks, fund managers, private banking clients, insurance companies and hedge funds.