30 October 2024 - The Islamic Development Bank (IsDB, the Bank) issued its third public issuance of the year, raising €500 million from the global capital markets.

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 PJSC, BNP Paribas, Credit Agricole Corporate and Investment Bank, GIB Capital, ING, J.P. Morgan Securities plc, Landesbank Baden-Württemberg and NATIXIS.

The Euro-denominated paper is the Bank’s second consecutive benchmark size issuance this month, following a US$ 1.25 billion issuance three weeks ago. The issuance proceeds will be deployed towards projects in line with the Bank’s strategic objectives that are (a) boosting recovery, (b) tackling poverty and building resilience, and (c) driving green economic growth under its Realigned Strategy.

The Bank announced the mandate on Tuesday, 29 October, to sound the market and receive expressions of interest from investors. With strong indications, the transaction was then announced to the markets on Wednesday, 30 October, with guidance set at 5Y EUR Mid Swap (MS) plus 50 basis points (bps) area. Having achieved the target benchmark size by 1230 hrs London time on the same day, and with an oversubscribed orderbook, the Bank maintained the final guidance as is, which translated into an overall profit rate of 2.798%, payable on an annual basis. The issuance was priced at par.

In terms of the final allocation, the distribution was well diversified with 47% allocated to Middle East & North Africa, 42% to Europe, 11% to UK and Ireland and 1% to the CIS region. 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 33% was allocated to central banks and official institutions, 39% to bank treasuries and private banks and 29% to asset managers, fund managers and pension and insurance funds.

Dr. Zamir Iqbal, the Vice President (Finance) and CFO of IsDB, said: “This is another milestone issuance in Euros for IsDB in a dynamic environment and we are very pleased with the investors’ response, especially our anchor investors as well as new investors. We thank them for their trust in IsDB’s mission of sustainable development and supporting this transaction.”

Mr. Mohammed Sharaf, the IsDB Treasurer and Mr. Zakky Bantan, the Manager of the Capital Markets Division added, “We are grateful for the positive response from the investors for the issuance, which is another benchmark as we move forward to complete our Funding Plan this year amid market volatility. We would like to thank the team as well as the joint lead managers for their efforts for delivering another successful transaction for the Bank.”

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.