7 March 2023 - The Islamic Development Bank ("IsDB") raised US$ 2 billion with its first public Sukuk issuance of the year.

The Bank, rated Aaa/AAA/AAA by S&P, Moody’s and Fitch (all with Stable Outlook) successfully priced the 5-year Trust Certificates under its US$25 billion Trust Certificate Issuance Programme. It was priced at par with a profit rate of 4.598%, payable on a semi-annual basis.

The Joint Lead Managers and Joint Bookrunners for this issuance were BNP Paribas, Citi, Dukhan Bank, Emirates NBD, HSBC, Islamic Corporation for the Development of the Private Sector, SMBC Nikko, Société Générale and Standard Chartered Bank.

The proceeds of the issuance will be utilized by IsDB for its general corporate purposes, which includes extending project financing to its Member Countries for sustainable development including strengthening food security, climate action and building resilience. This will be implemented under the fit-for-purpose Realigned Strategy of the Bank with a sharper focus on green, resilient, and sustainable infrastructure as well as inclusive human development.

The transaction was announced to the markets on Monday, 6 March, with Initial Price Thoughts (IPTs) set at 5Y US SOFR Mid Swap (MS) plus 60 basis points (bps). With a strong and over-subscribed order book, the Bank further tightened by 5 bps to finally land at 5Y US SOFR MS plus 55 bps, which translated into an overall profit rate of 4.598%.

In terms of the final allocation, the distribution was well diversified with 70% allocated to Middle East & North Africa, 15% to Asia, 8% to Europe and 7% to Africa and others. Overall, the deal witnessed strong participation from real money accounts and official institutions as well as a number of first-time investors, a testament of IsDB’s credit strength, as 62% was allocated to central banks and official institutions, 37% to bank treasuries and 1% to fund managers, private banks and others.

Following the pricing, Dr. Zamir Iqbal, the Vice President (Finance) and CFO of IsDB, said: “We are very pleased with our first transaction of the year. The outcome met our objective of building on the success of our prior issuances. This is a testament of the robust balance sheet of IsDB and we are confident of sustained demand for our Sukuk again when we return to the markets later in the year. We are very thankful to IsDB’s Member Countries and all the investors for their trust in IsDB and its mission of sustainable development. We also welcome our new investors who subscribed to IsDB Sukuk for the first time as our partners in development”.

Mr. Mohammed Sharaf, the IsDB Treasurer and Mr. Zakky Bantan, the Manager of the Capital Markets Division added, “We are delighted to have successfully closed the US$ 2 billion issuance despite looming headline risks and increasing market volatility. We are very thankful to all the investors, especially the new ones, especially the Central Bank community and Bank Treasuries who subscribed to our Sukuk for their confidence in IsDB’s AAA-rated paper. We would like to commend the joint lead managers for their efforts delivering a successful deal”.

IsDB is a supranational and multilateral development financial institution with 57 Member Countries and a mandate of delivering sustainable socio-economic development in Member Countries and Muslim communities worldwide.