20 October 2022 - The Islamic Development Bank ("IsDB") has raised US$ 1 billion with its second public Sukuk issuance of the year.

The Bank, rated Aaa/AAA/AAA by S&P, Moody’s and Fitch (all with Stable Outlook) successfully priced the 5-year Trust Certificates under its US$25 billion Trust Certificate Issuance Programme. It was priced at par with a profit rate of 4.747%, payable on a semi-annual basis.

The Joint Lead Managers and Joint Bookrunners for this issuance were BNP Paribas, Credit Agricole CIB, Dukhan Bank, Goldman Sachs International, Islamic Corporation for the Development of the Private Sector, JP Morgan, Mizuho, Standard Chartered Bank and SNB Capital.

The proceeds of the issuance will be utilized by IsDB for its general corporate purposes, which includes extending project financing to its Member Countries for recovery from the pandemic, food security, socio-economic development as well as climate action, among others.

The transaction was announced to the markets on Wednesday, 19 October with Initial Price Thoughts (IPTs) set at 5Y US SOFR Mid Swap (MS) plus 65 basis points (bps) area. With an over-subscribed order book, the Bank tightened the guidance by 3 bps on Thursday, 20 October, and finally closed the deal at 5Y US SOFR MS plus 62 bps, which translated into an overall profit rate of 4.747%.

In terms of the final allocation, the distribution was well diversified with 51% allocated to Middle East & North Africa, 26% to Europe, 12% to Asia and 11% to Africa and others. Overall, the deal witnessed strong participation from real money accounts and official institutions as well as a number of first-time investors, a testament of IsDB’s credit strength, as 53% was allocated to central banks and official institutions, 45% to bank treasuries and 2% to fund managers, private banks and others.

Following the pricing, Dr. Zamir Iqbal, the Vice President (Finance) and CFO of IsDB, said: “We are very pleased to have concluded the second issuance of the year with such an overwhelming response from investors around the globe. This proves that there is substantial investor demand for high quality paper, especially in the backdrop of increasing market volatility and uncertainties due to the many headline risks. We are very thankful to all the investors, especially the new ones who subscribed to our Sukuk for their confidence in IsDB’s AAA-rated paper. We would also like to thank all the Joint Lead Managers for their efforts towards the success of this transaction.”

IsDB is a supranational and multilateral development financial institution with 57 Member Countries and a mandate of delivering sustainable socio-economic development in Member Countries and Muslim communities worldwide.