Abu Dhabi Islamic Bank (ADIB), a leading financial institution, has announced that it has successfully raised $500 million via a green sukuk offering, marking the world’s first ever green US dollar sukuk issued by a financial institution. 

 

ADIB, which is rated A2 by Moody’s and A+ by Fitch, in each case with a stable outlook, priced the five-year senior sukuk rated A+ by Fitch at a profit rate of 5.695 percent per annum payable semi-annually. 

 

The new sukuk will be listed and traded on London Stock Exchange’s International Securities Market and Sustainable Bond Market.

 

The issuance was met with exceptional demand, attracting interest from over 100 global and regional investors with the final orderbook closing at $2.6 billion, representing an oversubscription rate of 5.2 times. 

 

This has allowed the final price guidance to be tightened meaningfully by 30 basis points to 115 basis points over five-year US Treasury Rate, from initial price thoughts of 145 basis points.

 

ADIB intends to allocate an amount equal to the net proceeds of this issuance to fund eligible green projects to accelerate climate transition, which may include the financing or refinancing of green projects as well as financing customers for eligible green projects as described under the Eligibility Criteria in the ADIB Sustainable Finance Framework.

 

ADIB Group CEO Nasser Al Awadhi said: "We are thrilled to be the first financial institution in the world to issue the first USD-denominated green Sukuk, which builds on ADIB’s efforts to address climate change and to advance sustainable solutions that protect the environment and help facilitate a transition to a low-carbon economy."

 

"This is an important step in our sustainability journey and will further expand the bank’s role in catalyzing capital to address the pressing environmental and social issues facing society today," he added.

 

"We have received exceptional interest from a broad range of domestic, regional and international investors. Demand for this issuance exceeded the issue size by 5.2 times, highlighting the tremendous demand and confidence from global investors in ADIB's asset quality," stated Al Awadhi.

 

"We are also pleased to see this strong international demand continue as the pricing was tightened significantly. The overall success of this Sukuk 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 78% to Mena, 13% to Europe 9% to Asia and US. By investor type, private banks 26%, Asset and Fund managers 17%, commercial banks 42% and others 16%.