The Islamic Development Bank has successfully priced a US$1.25 billion, 5-year Fixed Rate Trust Certificates (Sukuk) under its US$25 billion Trust Certificate Issuance Programme. The Sukuk was priced at par at 3.10%, to be payable on semi-annual basis. This issuance is the Bank’s first benchmark public issuance in 2018. 

CIMB, Citi, Emirates NBD Capital, Gulf International Bank, HSBC, Natixis, SMBC Nikko and Standard Chartered Bank acted as the joint lead managers (JLMs) and joint book runners.

The mandate was announced on February 28, 2018.  Orderbook was opened with the release of the initial price thoughts on Wednesday, March 07,2018. The Sukuk was priced on Thursday, March 08, 2018 at Mid Swap (MS) plus 33 basis points (bps), 4 bps lower than the IsDB’s September 2017 issuance which was priced at MS + 37 bps. 

The IsDB’s issuance of a sizeable benchmark at a lower spread to its last issue in September 2017 at a time when global interest rates are rising is a clear testament to IsDB’s strong credit and financial position, reaffirmed by its AAA ratings. The Trust Certificates will be listed on the London Stock Exchange, NASDAQ Dubai and Bursa Malaysia (under the Exempt Regime).

In terms of the final allocation, 61% of the issue size was allocated to investors in MENA, 18% to investors in Europe, and 21% to Asian investors. In terms of investor type, the deal saw strong participation from real money accounts and official institutions providing credence to IsDB’s credit strength.  74% of issue size was allocated to central banks and official agencies, while 26% was allocated to Banks and Fund managers. 
 
Dr. Zamir Iqbal, the  Vice President, Finance, and CFO commented: "We are very pleased with the outcome of the deal which met our objectives for the transaction to continue building on the success of our prior deals, and we are also happy to see new investors subscribing in the Sukuk. I would like to thank the IsDB’s member countries and other investors for their continuous support and commend the lead managers for delivering a deal that will make valuable contribution to meet our developmental objective.”