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Commercial Bank of Dubai’s inaugural $500mn 5-yr Green Bond issuance

Commercial Bank of Dubai successfully returns to the senior unsecured $ bond market with its inaugural $500mn 5-yr Green Bond issuance. On Monday June 5th, the Commercial Bank of Dubai (“CBD”), one of the leading conventional banks in the United Arab Emirates (“UAE”), announced its intention to issue a debut Green Bond.

Natixis acted as Active Join Bookrunner and Sole ESG Coordinator for this inaugural Green Bond issuance, with proceeds aimed at refinancing green eligible assets under the green buildings and renewable energy CategoriesNatixis was exclusively in charge of advising CBD on the structuring and establishment of its Sustainable Financing Framework.

Seizing the right market window…

After the announcement, CBD engaged in a 2-day marketing exercise to provide investors with a credit update and to introduce its Sustainable Financing Framework and sustainability strategy. Through this marketing exercise, CBD was able to connect with both conventional and ESG specialized investors and received relevant questions regarding the green format demonstrating strong interest from the latest.   

CBD seized the right market window, with limited competitive supply. On Wednesday 7th June  at 7.30am UK time on, CBD released Initial Price Thoughts for a $500mn issue size (no grow) at T+175bps area. Within two hours, the orderbook grew to more than $1bn and continued to increase, which allowed CBD to release guidance at T+145-150bps with books going subject at 12:30pm UK time. Shortly after, the final spread was at an even tighter level of T+140bps and the deal was launched as final books peaked at $1.4bn (2.8x oversubscribed). The final tightening of 35bps from Initial Price Thoughts represents the largest compression seen so far this year on any MENA conventional financial institution deal. The transaction also demonstrated significant participation of global ESG investors.

This transaction represented the third ever UAE conventional FI Green bond and the first issuance from a Dubai-based conventional bank.

Sustainable Financing Framework to allow the issuance of green, social, or sustainable instruments

In April 2023, CBD published its Sustainable Financing Framework (“the Framework”), which benefited from a Secondary Party Opinion by ISS ESG. Under the Framework CBD can issue Green, Social and/or Sustainable financing instruments, which include but are not limited to bonds, sukuks, loans, etc. For this specific transaction, CBD chose to issue in the Green Bond format and to use the proceeds to refinance eligible assets that fall under the Green Buildings and Renewable Energy Use-of-Proceeds categories. The framework covers both eligible green and social categories, as detailed in Figure 1 below.


The successful issuance of CBD’s inaugural Green Bond, underscores CBD’s strategic dedication to developing sustainable finance to drive further origination of green loans and its proactive approach in integrating sustainability into their activities going forward. By supporting the UAE’s net-zero ambitions and contributing to a greener future, CBD is aligning itself with global environmental goals and driving sustainable finance to help foster a more resilient economy.

The market for green and sustainable bonds and sukuks in GCC economies set a record in 2022 amid increased participation from banks and government related entities. 2023 is also expected to reach new highs as the region continues to focus on the green economy and in the run-up to COP28 that will be hosted by the UAE later this year. CBD’s inaugural green bond issuance helps strengthen the enabling environment in the region for other entities to tap into the green and sustainable bond market.