8 November 2023 - The Islamic Development Bank (IsDB, the Bank) made a comeback to the Euro market by issuing €550 million, its third 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.

The Joint Lead Managers for this issuance were Abu Dhabi Commercial Bank, Crédit Agricole CIB, HSBC, J.P. Morgan, Societe Generale and Standard Chartered Bank.

The benchmark size issuance marks the return of IsDB in the Euro public market since its debut Green Sukuk issuance that mobilized €1 billion in November 2019. The proceeds of this issuance will be directed towards IsDB commitments for sustainable development in its Member Countries under its Realigned Strategy. The Strategy focuses on three overarching, interconnected strategic objectives. These are (a) boosting recovery, (b) tackling poverty and building resilience, and (c) driving green economic growth.

The transaction was announced to the markets on Monday, 6 November, with Initial Price Thoughts (IPTs) set at 5Y EUR Mid Swap (MS) plus 33 basis points (bps) area. With the target benchmark size achieved on the next day with a strong orderbook, the Bank maintained the final guidance as is, which translated into an overall profit rate of 3.456%, payable on an annual basis. The issuance was priced at par.

In terms of the final allocation, the distribution was well diversified with 58% allocated to Middle East & North Africa, 34% to Europe, 6% to Africa and 2% to Asia. 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 56% was allocated to central banks and official institutions, 40% to bank treasuries and 4% to asset managers, fund managers and others.

Dr. Zamir Iqbal, the Vice President (Finance) and CFO of IsDB, said: “After a hiatus of 4 years, I am delighted with the outcome of our third Euro public Sukuk since 2018. We are thankful to both our anchor as well as new investors for their trust in IsDB’s mission of sustainable development and the support for this transaction.”

Mr. Mohammed Sharaf, the IsDB Treasurer added, “The investor response was very positive in a volatile market backdrop. This helps us build a strong foundation to achieve our objective of becoming a frequent EUR issuer in the global capital markets. We would like to thank the joint lead managers for their efforts in delivering a successful 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.