* DIB prices $500 mln 5-yr sukuk; 4.752 pct coupon
* First foray into debt market since 2007
* Prices despite market volatility, benefits from sukuk
(Adds pricing info, background)
DUBAI, May 22 Dubai Islamic Bank
priced a five-year, $500 million Islamic bond, or sukuk, on
Tuesday, the first time the bank has tapped debt capital markets
The deal priced at par with a profit rate of 4.752 percent
at a spread of 365 basis points over midswaps, arranging banks
The spread was 10 basis points tighter than initial price
guidance released the previous day, indicating good demand for
The sukuk market has proved relatively resilient amid the
latest phase of euro zone volatility, benefiting from the
ability to tap pockets of liquidity in the Middle East which are
sheltered from wider market dislocation.
Deutsche Bank, Emirates NBD, National
Bank of Abu Dhabi, HSBC and DIB itself are
bookrunners on the deal.
While DIB itself has not issued since 2007, Dubai's largest
Islamic bank did guarantee a $300 million five-year sukuk from
Islamic mortgage lender subsidiary Tamweel in January.
That transaction priced at par with a profit rate of 5.154
percent and carried a spread of 400 basis points over midswaps.
Tamweel 2017s were trading at a z-spread of 415 bps on
Monday, but the bonds are not very liquid. The z-spread is a
pricing tool which calculates the number of basis points that
need to be added to a zero-coupon yield curve to make the bond's
discounted cash flows equal the bond's present value.
(Reporting by Rachna Uppal; Editing by Amran Abocar)