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Islamic Development Bank launches bond issue worth $400m
The Islamic Development Bank (IDB) has announced the successful launch of its debut capital markets' $400 million Islamic Sukuk issue.
- By A Staff Reporter
- Published: 00:00 August 3, 2003
The Islamic Development Bank (IDB) has announced the successful launch of its debut capital markets' $400 million Islamic Sukuk issue.
The issue was increased from the original targeted size of $300 million due to strong demand.
As the first international Islamic capital markets bond issue by a non-sovereign and only the second such international Islamic issue, the transaction was priced to yield 3.738 per cent, equivalent to a margin of 16 basis points (bp) over the five-year mid-swap rate, at the tighter end of the indicated pricing range of 15-20 basis points.
Citigroup acted as ratings advisor, sole bookrunner and lead manager on the transaction with Abu Dhabi Islamic Bank (Adib) and Kuwait Finance House (KFH) acting as co-lead managers. HSBC and Nomura International acted as arrangers.
The inaugural issue was met with strong demand from the Middle East, Asia and Europe following a comprehensive roadshow conducted by the IDB management team in Saudi Arabia, Bahrain, the UAE, Malaysia, Switzerland and the UK.
The transaction was well distributed with Central Banks, commercial banks, investment managers and Islamic institutions participating in this transaction.
"This transaction signifies a paradigm shift in the way IDB funds itself and is a template for future capital raising exercises," said Muzafar Al Haj Muzafar, vice-president, IDB.
"We are pleased with the response we have received from the market and hope to continue to broaden and deepen our relationships with our investors.
"IDB has been a keen advocate and supporter of the development of the Islamic capital markets and views this issue as the benchmark for future issues by the IDB and other member countries of the bank," he added.
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