Emirates Islamic Issues World's First Sustainability-Linked Financing Sukuk Of $500 Million

Emirates Islamic, a leading Islamic financial institution in the UAE and part of Emirates NBD Group, has successfully priced a $500 million sustainability-linked financing sukuk.

This issuance is the first sustainability-linked financing sukuk globally. it attracted a very strong order book reaching $1.2 billion and was oversubscribed 2.4 times.

The issuance drew diversified interest, with 10 per cent institutions in Europe, five per cent in Asia, and 83 per cent in the Middle East participating, underscoring global confidence in Emirates Islamic's financial strength (Fitch A+) and its commitment to sustainable Islamic finance.

Strong demand allowed the bank to compress the spread to 95 basis points over 5-year US Treasuries, equating to a profit rate of 4.540 per cent per annum. Allocation saw 75 per cent of the Sukuk go to banks and private banks, 20 per cent to fund managers, and 5 per cent to investments/public funds/sovereign wealth funds.

Farid AlMulla, chief executive officer of Emirates Islamic, said:“We are proud of this Sukuk's success which showcases the confidence international investors have with Emirates Islamic's financial performance and the overall UAE credit story. The new Sustainability-Linked Financing Sukuk Framework demonstrates our bank's innovation in this space and aligns with our long-term strategy”.

Mohammad Kamran Wajid, deputy chief executive officer, Emirates Islamic, added:“We have a successful track record in the international Sukuk market and this transaction cements our profile with fixed income investors. We were extremely pleased with the strong investor demand and appetite for this sustainability linked issuance”.

Ebrahim Qayed, Head of Treasury and Markets, Emirates Islamic, commented:“The market's reaction to our new Sustainability-Linked Financing Sukuk has been truly outstanding. This successful issue, a world-first, clearly shows that investors are increasingly keen on new, Shariah-compliant sustainable finance opportunities from Emirates Islamic.”

Vijay Bains, chief sustainability officer and group head of ESG at Emirates NBD, said:“This landmark transaction underlines our role as a pioneer in sustainable finance and reflects our commitment to embedding sustainability at the heart of our strategy while supporting the UAE's Net Zero 2050 ambition.”

The sukuk was issued under Emirates Islamic's $4 billion sukuk programme, which is listed on both Nasdaq Dubai and Euronext Dublin stock exchanges. The proceeds from this issue will fund various general corporate purpose sustainability-linked financing projects, in line with Emirates Islamic's sustainability-linked financing sukuk framework. This framework has received a second party opinion from ISS-Corporate confirming its alignment with international best practice.

Emirates NBD Capital and Standard Chartered Bank acted as joint sustainability advisors. The joint lead managers and bookrunners for this deal were Arab Banking Corporation (B.S.C), Citibank, Dubai Islamic Bank, Emirates NBD Capital, Mashreq, Sharjah Islamic Bank, and Standard Chartered Bank.

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