The Islamic Development Bank (IDB) has raised US$ 1.6 billion
with its first public Sukuk issuance of the year. It was priced at a profit
rate of 3.213 percent, payable on a semi-annual basis.
According to the statement
published by the Bank, the proceeds of this Sukuk will be used to finance
projects under the development mandate of the Bank - which targets poverty alleviation, human
development, sustainable agriculture, transport, education, health and water
infrastructure, climate action, among others, in its Member Countries. It also
covers initiatives to support the Member Countries’ recovery from the pandemic.
The Bank comprises of 57 member countries, including Maldives.
The rating agencies S&P,
Moody’s and Fitch have rated the Bank Aaa/AAA/AAA respectively..
The Joint Lead Managers and
Joint Bookrunners for this issuance were; Citi, Dubai Islamic Bank, HSBC, KFH
Capital, NATIXIS, SMBC Nikko, Société Générale, SNB Capital and Standard
Chartered Bank.
“The issuance attracted
very strong demand from real money investors looking for both quality and value
and this was validated by IsDB’ s robust credit and financial position and
reaffirmed by its top-tier AAA ratings”, said a statement by IDB.
Looking at the investor
profiles, the distribution was well diversified with 63 percent allocated to
Middle East & North Africa, 25 percent to Asia, and 12 percent to Europe. According to the Bank, the deal witnessed strong participation overall, from real money accounts and
official institutions as well as a number of first-time investors.
According to IDB, 68 percent was allocated to central banks and
official institutions, 28 percent to bank treasuries and 4 percent to fund
managers, private banks and others.
The Trust Certificates will
be listed on Euronext Dublin and NASDAQ Dubai.
Following the pricing, IDB President,
Dr. Muhammad Al Jasser, stated that the Bank is very pleased to
have successfully closed its first Sukuk issuance of the year, especially in
the context of the state of the current global markets. He said: “As IDB
continues to support the full recovery of its Member Countries from the
pandemic, mobilizing market resources through Sukuk remains a core component of
our strategy. We are very thankful to the investor community for placing their
trust in IDB’s mission of sustainable social and economic development.”
IsDB is a multilateral
development financial institution with 57 Member Countries and a mandate of
delivering social and economic development in Member Countries and Muslim
communities worldwide.
The private sector arm of IDB, the Islamic Corporation for the
Development of the Private Sector (ICD) recently assisted the Maldives government
to issue a sovereign sukuk to the international market, that raised a total of
USD 500 million.