The International Finance Corporation (IFC), a member of the World Bank Group, has listed a US$100mn sukuk on Nasdaq Dubai and jointly on the Bahrain Stock Exchange.
The AAA-rated hilal sukuk has a five-year maturity. Nasser Saidi, chief economist of the Dubai International Financial Centre (DIFC) said in his speech at the GCC and City of London conference in London: "This sukuk is confirming that Islamic finance is maturing and truly joining the mainstream.
"By issuing a sukuk, the IFC and the World Bank have recognised shariah-compliant finance by securities as valid and acceptable financial instruments."
The sukuk was priced at 15 basis points over mid-swaps. Saidi continued: "The IFC sukuk is not only a benchmark in pricing, it has also addressed the industry's major challenges of standardisation."
Saidi noted that the debt markets in the Middle East are relatively small, accounting only for around 6% of GDP, but that Islamic finance is an area of tremendous growth. "Islamic finance has come of age as an asset class and today offers a valid and credible alternative to conventional financing," he concluded.
Nasdaq Dubai is the world's largest exchange for sukuk by listed value, with 21 listed sukuk valued at US$16.7bn as of November 2009.
Addressing the same conference, Lord Davis of Abersoch, the UK's minister for trade, investment and business, said in his opening remarks: "I think there is a huge opportunity for the UK and London in particular to partner with Dubai and the GCC and really build a partnership. Most analysts agree that the UAE economy is likely to see strong growth in the medium term and the recent bond issue clearly has restored confidence."
The IFC has raised the money to fund health, education and infrastructure investments in the region. The syndicate of joint lead managers includes HSBC Amanah, Dubai Islamic Bank, Kuwait Finance House Bahrain, and Liquidity Management House. International law firm Lovells acted as sole transaction counsel. The IFC announced the planned listing of the sukuk in October.
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