8 October 2024 - The Islamic Development Bank (IsDB, the Bank) raised US$ 1.25 billion with its second benchmark 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 4.047%, payable on a semi-annual basis.

The Joint Lead Managers and Joint Bookrunners for this issuance were BNP Paribas, BSF Capital, Citi, Dubai Islamic Bank, Emirates NBD Capital, HSBC, NATIXIS, Qatar International Islamic Bank, Societe Generale and Standard Chartered Bank.

The Bank will use the issuance proceeds towards sustainable development projects in its Member Countries. Celebrating its Golden Jubilee this year, IsDB aims to deliver socio-economic growth in its 57 Member Countries and Muslim communities globally. This covers projects targeting poverty, climate action, food insecurity, and building resilience. The initiatives follow the Bank's Realigned Strategy, emphasizing on green and resilient infrastructure and inclusive human development.

The Sukuk transaction was announced to the markets on Monday, 7 October, with Initial Price Thoughts (IPTs) set at 5Y US SOFR Mid Swap (MS) plus 55 basis points (bps) area. With a strong orderbook, the Bank further tightened the guidance by 5 bps on Tuesday, 8 October, to finally land at 5Y US SOFR MS plus 50 bps, translating into an overall profit rate of 4.047%.

In terms of the final allocation, the distribution was well diversified with 58% allocated to Middle East & North Africa, 26% to Asia and 16% to Europe/UK. 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 62% was allocated to central banks and official institutions, 35% to bank treasuries, 3% to asset managers and fund managers.

After concluding pricing, Dr. Zamir Iqbal, the Vice President (Finance) and CFO of IsDB, said: “We are very pleased to have executed another benchmark issuance in a challenging environment. This would not have been possible without the strong support from IsDB’s Member Countries as well as our investors. Special thanks to the new investors who participated in IsDB Sukuk for the first time. They are now our partners for sustainable development around the world.”

Mr. Mohammed Sharaf, the IsDB Treasurer and Mr. Zakky Bantan, the Manager of the Capital Markets Division added, “This issuance is another milestone in our progress towards the Bank’s funding plan for the year. It also met our objectives of building on the success of our previous transactions and achieving a lower overall pricing for the Sukuk. We are very grateful to the investors for their confidence and would also like to thank the joint lead managers for their efforts on this trade.”

IsDB is a AAA-rated supranational and multilateral development financial institution with 57 Member Countries (MCs) and a mandate of delivering social and economic development with a focus on sustainability in its Member countries and Muslim communities worldwide. The Bank’s operations span across four continents, touching the lives of nearly 1 in 5 of the global population. Its mission is to equip people to drive their own economic and social progress at scale, putting the infrastructure in place and enabling them to fulfil their potential. The Bank’s targeted efforts across multiple continents foster an environment where the primary focus is on human development and well-being.