2 September 2026 - The Islamic Development Bank (IsDB, the Bank) raised US$ 1.5 billion (bn) through its second benchmark Sukuk issuance of the year.

The USD-denominated Sukuk transaction follows its highly successful first US$ benchmark earlier in May.

The Bank, rated Aaa/AAA/AAA by S&P, Moody’s and Fitch (all with Stable Outlook) priced the 5-year Trust Certificates under its US$25 billion Trust Certificate Issuance Programme.

The Joint Lead Managers for this issuance were Bank of China (BOC), Barclays, BMO Capital Markets, China International Capital Corporation (CICC), Goldman Sachs International, HSBC, Industrial and Commercial Bank of China (ICBC), KFH Capital, NATIXIS, Société Générale.

The Bank announced the 5-year Sukuk transaction on Tuesday the 1^st of September, with Initial Pricing Thoughts (IPTs) at US$ SOFR Mid Swap (SOFR MS) plus 50 basis points (bps) area. Despite market volatility, strong investor demand helped the Bank build Indications of Interest (IOIs) in excess of ~US$ 2bn at market open on Wednesday, 2 September.

On the back of this strong momentum, the Bank opened the books, revising guidance to US$ SOFR MS plus 48 bps area and continued to attract high-quality orders from institutional investors. At 12 pm London time, the orderbook reached in excess of US$2.75bn, surpassing the previous highest amount of US$2.65bn that the Bank achieved earlier this year in May. The Bank maintained the level and set final terms with a spread at SOFR MS plus 48 bps, i.e. two bps tighter than IPTs and set final size at its target US$1.5bn. This led to the profit rate for the Sukuk being set at 4.781% for investors, payable on a semi-annual basis and priced at par.

The transaction attracted strong participation from Central Banks and Official Institutions accounting for 51% of the book, followed by Banks, and Private Banks (38%) and Asset/Fund Managers (12%). Final allocations were well diversified, with 39% from the Middle East and Africa, as well as a high degree of participation from international investors, including 13% from Asia, 36% from UK and Europe and 12% from Offshore US.

The Bank will deploy the proceeds of the Sukuk issuance towards project financing across the Bank’s eligible Member Countries in line with its Strategic Framework that delivers sustainable socio-economic growth for all.

The transaction highlights the credit strength and deep investor relationships of IsDB, achieving their transaction goals despite geopolitical volatility.

Dr. Abdourrabih Abdouss, the Officer-in-Charge, Vice President (Finance) and CFO of IsDB, said: “We are very pleased to have executed our latest issuance amidst the volatile market. The support from both existing and new investors is greatly appreciated and is a testament to the Bank's strong credit, robust backing from its Member Countries, and attractive profits for investors. We are grateful to all the investors for their continued support.”

Mr. Mohammed Sharaf, the IsDB Treasurer and Mr. Zakky Bantan, the Head of Funding added, “This Sukuk issuance represents a further key step forward for the Bank, helping us broaden our pool of investors while securing a more competitive pricing structure. We sincerely appreciate the confidence placed in us by our investors, especially in these more challenging circumstances, and commend all the joint lead managers for their meticulous execution of this project”.

This Sukuk issuance marks another important milestone for the Bank as we continue to make progress to achieve the approved Funding Program for the year. We would like to especially thank the new investors for their confidence in IsDB’s paper, in addition to all the Joint Lead Managers for their efforts in making this a successful transaction.”