Dubai, UAE — Dubai Islamic Bank (DIB) has priced a $1 billion Additional Tier 1 (AT1) perpetual sukuk after attracting more than $2.3 billion in investor orders, underscoring demand for Gulf bank debt despite heightened geopolitical tensions across the Middle East.
The UAE’s largest Islamic lender priced the non-call six-year sukuk at a profit rate of 6.25%, equivalent to a reset spread of 191.1 basis points over the interpolated U.S. Treasury rate.
The order book peaked at more than $2.3 billion, allowing the bank to tighten pricing from an initial guidance of around 6.625%.
DIB said the transaction was the largest GCC AT1 issuance in the recent period.
Demand spans global investors
More than 85 institutional investors from the Middle East, Europe and Asia participated in the offering.
Investors from the Middle East and North Africa received 83% of allocations, while investors from the UK, Europe and other international markets accounted for the remaining 17%.
Banks and private banks took 77% of the issuance, followed by fund managers with 21%. Insurance companies, pension funds and sovereign wealth funds accounted for the remaining 2%.
“The strong outcome of this issuance reflects the market’s continued confidence in DIB’s financial strength, disciplined capital strategy and ability to deliver successful transactions even in challenging conditions,” Group Chief Executive Adnan Chilwan said in a statement.
Gulf debt markets remain resilient
The transaction comes as Gulf borrowers continue to access international debt markets to strengthen balance sheets and diversify funding sources, even as investors navigate geopolitical risks and shifting interest-rate expectations.
The GCC has emerged as one of the world’s most active debt issuance regions in recent years, with governments, banks and corporates collectively raising well over $100 billion annually through bonds and sukuk as they finance economic diversification programs and infrastructure investments.
Regional lenders have benefited from strong liquidity and sustained investor interest in investment-grade Gulf credits, particularly issuers backed by robust economic fundamentals and healthy capital positions.
Capital remains a priority
Additional Tier 1 instruments form part of banks’ regulatory capital framework and are commonly used to support capital ratios while providing flexibility for future growth.
DIB, rated A3 by Moody’s and A by Fitch, is among the world’s largest Islamic banks and a regular issuer in global sukuk markets.
The bank launched investor marketing on June 8 following a series of calls updating investors on its latest financial performance. The order book opened the following day and grew rapidly despite volatile market conditions.
The sukuk will be listed on Euronext Dublin and Nasdaq Dubai.
