Islamic Development Bank Prices US$ 1.5 Billion Sukuk Issuance

The Islamic Development Bank ("IsDB"), rated Aaa/AAA/AAA by Moody’s, S&P and Fitch (all stable outlook), has successfully priced US$1.5 billion, 5-year Trust Certificates (Sukuk) under its US$25 billion Trust Certificate Issuance Programme. The Sukuk was priced at par at 1.957%, to be payable on semi-annual basis, marking IsDB’s second public issuance in 2019.

The Joint Lead Managers and Bookrunners for this issuance are Citi, Emirates NBD, First Abu Dhabi Bank, Gulf International Bank, HSBC, RHB Investment Bank Berhad, Société Générale, and Standard Chartered Bank. The Islamic Corporation for the Development of the Private Sector (ICD) was appointed as a Co-Manager.

The mandate was announced on September 19th, with the roadshow on 23rd & 24th of September in London. The book-building process began on Tuesday, September 24th with the release of the initial price thoughts of Mid Swap (MS) plus high 50s basis points (bps) area at UK noon. With a strong demand from investors, IsDB was able to set the guidance at MS+50bps to 55bps area the following day. The deal was eventually priced at MS plus 50bps, with an overall profit rate of 1.957% compared to IsDB’s April 2019 issuance which had the profit rate of 2.843%.

In terms of the final allocation, the distribution was well diversified with 35% allocated to Middle East, 28% to Asia, 18% to Africa, 18% to Europe and 1% to others. Overall, the deal witnessed strong participation from real money accounts and official institutions, a testament of IsDB’s credit strength, as 69% was allocated to central banks and official institutions, and 31% to bank treasurers, fund managers and Private Banks.

The Trust Certificates will be listed on Euronext Dublin, NASDAQ Dubai and Bursa Malaysia (under the Exempt Regime).

Dr. Zamir Iqbal, the Vice President, Finance, and CFO of IsDB, commented: “We are very pleased with the outcome of the deal in terms of size, lower pricing and higher number of diversified orders compared to the last US$ trade in April. We are also happy to see new investors subscribing in the Sukuk. With this deal the IsDB has achieved 80% of its Funding plan for the year and we look forward to further mobilizing resources via a EUR public Sukuk and private placements in Q4. I would like to thank the IsDB’s member countries and other investors for their continuous support which has further strengthened our relationship and commend the lead managers for delivering a successful deal that fully met our objectives. We hope that this funding will continue to contribute towards extending better financing terms to our member countries to support their developmental needs.”

Top