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Thu 4 Jun 2009 12:50 AM

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Dubai Islamic Bank buys back trust certificates

Purchase by DIB part of tender offer to retire $200m of outstanding sukuk certifcates.

Dubai Islamic Bank (DIB), the largest Islamic bank in the UAE, confirmed on Wednesday it has purchased $50.6 million from the partial cash tender offer to retire $200 million of outstanding sukuk certificates - first announced last month.The trust certificates were bought at 88% of face value - the transaction having been settled on May 21.

In a statement the bank noted investor confidence in DIB with a significant percentage of investors having decided to hold their certificates.

DIB is rated A1/A- by Moodys and S&P.

''This transaction is a testament of the market's confidence in DIB's future earning capabilities and its growth strategy,''  Mohammed Saleem, Chief of Treasury at DIB, said.

''Our investors have reiterated their comfort in their ongoing exposure to DIB, and this is a major validation of our financial strength and the franchise value.

''Taking into consideration recent market developments, DIB successfully established a competitive cash tender offer for the trust certificates, creating a favourable offer for investors as well as realising a net gain for DIB.

''The bank continues to be in a positive liquidity position and maintains sufficient funding to retire the facility earlier than maturity. This marks another successful transaction for DIB, and further validates our business strategy amidst challenging conditions.''

The five-year sukuk facility was launched in the first quarter of 2007 through its inaugural $750 million Sukuk Certificates.

Barclays Capital, DIB Capital and Standard Chartered Bank acted as the lead managers for the cash tender offer.

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