International law firm Latham & Watkins has advised the Abu Dhabi Islamic Bank (ADIB), the emirate’s largest sharia-compliant lender, on its first Basel III-compliant Islamic bond issuance, worth $1 billion.
The Tier 1 perpetual sukuk, which has no defined maturity date, was launched at a profit rate of 6.375 percent, tighter than indicated guidance, after receiving orders of over $15 billion for the deal. ADIB plans to use proceeds from the issuance to strengthen and diversify its capital base.
The Latham team was led by Abu Dhabi partner Nick Collins and Dubai partner Kai Schneider, who were supported by Dubai counsel Dipti Thakar and associate Lee Irvine. The team also included London partner Lene Malthasen and associate Theo Kalic. Regulatory advice was provided by New York partner Courtenay Myers Lima and Milan associate Roberto Luis Reyes Gaskin.
“The successful closing of this landmark transaction represents a significant milestone for the Middle East sukuk market. This is the first public hybrid Tier 1 capital issuance by a Middle East issuer and, so far as we know, is the first ever public sharia-compliant hybrid Tier 1 capital issuance,” said Collins. “The transaction structure demonstrates the increasing range of products in the Islamic finance market in the Middle East, and creates a benchmark and precedent for future issuances by Abu Dhabi Islamic Bank as well as other banks in the UAE and the wider Gulf region.”
The bank has mandated itself, HSBC Holdings, Morgan Stanley Inc, National Bank of Abu Dhabi and Standard Chartered Plc to arrange the deal.
Shaheen Pasha is Middle East Regional Editor at ALB. Follow us on Twitter: @ALB_TheBrief.
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