Emirates Islamic successfully issues $750 million sustainability sukuk

Sukuk is expected to carry a 5.431% profit rate per annum

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Emirates Islamic

Published: Wed 22 May 2024, 7:16 PM

Emirates Islamic, one of the leading Islamic financial institutions in the UAE, has announced the successful pricing of its $750 million first ever sustainability sukuk.

This is the first sustainability sukuk issued out of the UAE following the release of the International Capital Market Association (ICMA), the Islamic Development Bank (IsDB) and London Stock Exchange Group (LSEG) Guidance on green, social & sustainability sukuk in April 2024.

The five-year issue witnessed robust demand from investors across different regions and was oversubscribed 2.8 times. The strong order book, which exceeded $2.10 billion, allowed the bank to tighten the profit rate to 5.431 per cent per annum, at a spread of 100 basis points over five-year US Treasuries. This sustainability sukuk was issued in line with Emirates NBD Group’s sustainable finance framework and in compliance with Shariah rules and principles as determined by Emirates Islamic’s internal Shariah supervision committee.

Farid Al Mulla, chief executive officer of Emirates Islamic said: “Emirates Islamic is pleased to launch our first ever five-year $750 million sustainability sukuk, reaffirming our commitment to sustainable Islamic financing. Emirates Islamic is committed to reducing its environmental impact, in line with the UAE Net Zero by 2050. We remain committed to promoting sustainable Islamic finance and supporting and guiding our clients in making sustainable financial decisions, reinforcing our dedication to building a more sustainable future.”

Mohammad Kamran Wajid, deputy chief executive officer of Emirates Islamic added: “We are proud to conclude our first ever sustainability sukuk, marking a significant milestone in our group wide sustainability journey. As one of the leading Shariah-compliant banks in the UAE, Emirates Islamic remains committed to addressing climate change by offering customers sustainable Islamic solutions that prioritise the environment and support a low-carbon economy.

Vijay Bains, group chief sustainability officer, group head of ESG at Emirates NBD said: “The issuance of our first sustainability sukuk exemplifies our ongoing commitment to introducing tailored and innovative ESG-linked financial solutions that will drive the global shift towards a sustainable economy. It also strengthens the Group’s commitment to becoming industry leaders in sustainable finance.”

Emirates NBD Capital and Standard Chartered Bank were joint global coordinators, along with Abu Dhabi Islamic Bank PJSC, Dubai Islamic Bank PJSC, First Abu Dhabi Bank PJSC and The Islamic Corporation for the Development of the Private Sector (ICD) as joint lead managers and Joint Bookrunners. Emirates NBD Capital acted as sole sustainability structuring agent.

The Emirates NBD Group has been part of the working group that contributed to the labelled sukuk guidance and efforts led by ICMA, IsDB and LSEG along key global stakeholders.

In 2023, the bank celebrated a first in UAE banking history by issuing an Dh1 billion public sukuk. This unique three-year offering was oversubscribed 2.5 times, highlighting the strength of the dirham sukuk market, and emphasising confidence in the local currency market from global Shariah-compliant investors.