Dubai Islamic Bank (DIB) sold USD 750 mn of its maiden sustainable Shariah-compliant bonds (sukuk), Reuters reported yesterday, citing a bank document. The five-year notes were sold at 155 basis points (bps) over five-year US treasuries, tightened from initial guidance on the back of high demand. DIB is the first Islamic bank in the UAE to issue sustainable sukuk bonds.

The issuance was a little over 2x oversubscribed, drawing more than USD 1.6 bn in orders from would-be investors, according to the document cited by Reuters. The bonds had initially been priced at around 175 bps over five-year US treasuries.

Where’s the money going? The funds will be used to fund projects pertaining to renewable energy, energy efficiency, sustainable transport, green buildings and wastewater management, the bank said last month when it set up the green financing framework ahead of the issuance.

Green bond issuances in the GCC (particularly for banks) have been on a roll recently: The GCC has been a hotbed of successful green bond issuances this year, with Abu Dhabi Commercial Bank (ADCB) raised USD 500 mn in a green bond sale in September — an issuance that was almost 4x oversubscribed, demonstrating strong investor demand in regional sustainable bonds. More recently, Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), sold USD 3 bn in green bonds last month — which were almost 6x oversubscribed.

There’s more coming down the MENA pipeline: ​​Egypt wants to roll out USD 500 mn in green bonds before the end of the fiscal year — which ends in July 2023.

Advisers: Bank ABC, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, KFH Capital, HSBC, Sharjah Islamic Bank and Standard Chartered were named as advisers in earlier reporting by Reuters.