DUBAI - Abu Dhabi Islamic Bank (ADIB) , the largest sharia-compliant lender in Abu Dhabi, has hired international banks to arrange the sale of $750 million in Islamic bonds, three sources familiar with the matter said.
ADIB's debt sale, which still needs final approval by the bank's shareholders, would follow months of subdued activity in the Middle East primary bond market, as potential issuers in the region have held back their plans because of market volatility and the price premium they might have to pay to attract demand.
HSBC and JPMorgan have been hired as coordinators for the sukuk deal, said one of the sources, while other banks will join the transaction at a later stage.
ADIB, HSBC and JPMorgan declined to comment.
ADIB's shareholders will vote on Aug. 19 on the planned transaction, a $750 million perpetual Tier 1 sukuk, and on the proposed repayment of an outstanding $1 billion perpetual sukuk issued in 2012.
Perpetual bonds mimic some of the characteristics of equity because they lack a maturity date.
The bank's board is also proposing to raise capital through a 1 billion dirhams ($272.27 million) rights issue.
Prior to the $1 billion sukuk issued in 2012, ADIB had issued two five-year sukuk of $750 million and $500 million in 2010 and 2011. It repaid both the obligations without refinancing them.
ADIB reported last month a net profit of 572.7 million dirhams in the second quarter of this year against 551.6 million last year. Customer deposits amounted to 101.2 billion dirhams at the end of June. ($1 = 3.6728 UAE dirham) (editing by David Evans; editing by David Evans)
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