Dubai Islamic Bank plans to sell AT1 Islamic bonds as soon as this week: Sources

Dubai Islamic Bank, the United Arab Emirates’ largest Islamic lender, plans to tap the international debt markets with US dollar-denominated Additional Tier 1 (AT1) sukuk, or Islamic bonds, as soon as this week, two sources said on Monday.

AT1 bonds, the riskiest debt instruments banks can issue, are designed to be perpetual in nature but issuers can call them after a specified period.

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DIB, which raised $1 billion via AT1 sukuk in November, did not immediately respond to a request for comment.

Several Gulf lenders have taken advantage of low rates to shore up their Tier 1 capital this year. Saudi Arabia’s largest lender, National Commercial Bank, led the way in January by raising $1.25 billion in AT1 sukuk with the lowest coupon from the region.

Other Gulf banks that have issued AT1 bonds or sukuk this year were Qatar’s Ahli Bank and Commercial Bank, Kuwait’s Boubyan Bank and National Bank of Kuwait.