Abu Dhabi Islamic Bank considering dollar sukuk issue

Abu Dhabi Islamic Bank (ADIB), the largest sharia-compliant lender in Abu Dhabi, is considering whether to make a US dollar-denominated sukuk issue over the next few months, banking sources said on Monday.

The lender could potentially issue in May this year, one of the sources said, speaking on condition of anonymity because the information is private.

An ADIB spokeswoman told Reuters by email that ADIB had no immediate plan to issue sukuk. She did not elaborate.

The Islamic lender would join a number of Gulf Cooperation Council banks raising debt internationally through both Islamic and conventional bonds to improve their liquidity, which has been curtailed by low oil prices, and to bolster their capital ratios.

Bahrain-based Gulf International Bank was the first regional lender to raise debt internationally this year with a $500m bond sale in January.

It was followed by a $1bn sukuk sale by Dubai Islamic Bank, a $500m conventional bond by Ahli Bank Qatar and a $500m bond by the United Arab Emirates’ Bank of Sharjah.

This week, Kuwait’s Warba Bank is expected to make a U.S. dollar-denominated Tier 1 perpetual non-call sukuk issue.

ADIB issued $1bn of hybrid perpetual Tier 1 sukuk in 2012. Prior to that, it had issued two five-year sukuk of $750m and $500m in 2010 and 2011. It repaid both the obligations without refinancing them.

The bank’s total assets amounted to Dhs122.3bn ($33.3bn) at the end of 2016. The lender is rated A2 by Moody’s and A+ by Fitch.