Published: April 12, 2021
The Islamic Development Bank’s largest sustainable Sukuk issuance and its largest every US dollar denominated funding ignites the Islamic finance market across the GCC region where a shift towards Shariah-compliant instruments is accelerating.
The Islamic Development Bank (“IsDB”) successfully priced the US$2.5bn, 5-year Trust Certificates, sustainability Sukuk under its US$25bn trust certificate issuance programme. The Sukuk was priced at par with a profit rate of 1.262%, payable on a semi-annual basis, and was the first public issuance of the year for the bank.
Dr. Yasser Gado, the IsDB Treasurer said, “IsDB’ s largest-ever Sukuk issuance, since it became a frequent issuer back in 2009, plays a vital role toward accomplishing the bank’s ambitious funding plan for 2021. The size of the transaction, lower credit spread, and robust order book mirrored investors’ confidence in IsDB credit.
“We are delighted to see IsDB transactions acquiring new institutional investors with pace and determination. IsDB will continue its commitment to promote the awareness of Sukuk, as the renowned Sharia Compliant debt instrument within capital markets.
The US$2.5bn 2021 sustainable Sukuk follows closely on the heels of the IsDB’s inaugural sustainable Sukuk issued in June 2020 when the bank raised US$1.5bn for purposes specifically designed to aid the recovery from Covid-19. Sustainable and social sukuk are emerging as alternative asset classes that might help in the efforts against coronavirus. At the time of the 2020 inaugural sustainability Sukuk, the bank hailed the funding as a “breakthrough deal” that “achieved our funding objectives as demonstrated by the size and the lowest overall pricing for a public US$ Sukuk ever”.
How Sukuk has helped