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.