11 March 2025 - The Islamic Development Bank (IsDB, the Bank) raised US$ 1.75 billion (bn) through a benchmark Sukuk issuance in the capital markets. The transaction was successfully issued amidst a volatile market volatile period, demonstrating IsDB’s long standing presence in the US$ Sukuk market.

The USD-denominated Sukuk transaction is the Bank’s first US$ benchmark issuance this year, following significant milestones achieved in 2024 that saw three successful public benchmark transactions across Euro and US$ markets and the Bank crossing the US$ 50 billion mark in total Sukuk issuances since it started issuing in 2003.

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 BNP Paribas, Crédit Agricole CIB, Dubai Islamic Bank, GIB Capital, HSBC, KFH Capital, Nomura, Santander and SMBC.

With the proceeds of this issuance, the Bank will continue to support projects that deliver socio-economic growth in its 57 Member Countries and Muslim communities globally. The projects are aligned with the Bank’s three overarching objectives under the Bank’s Realigned Strategy, i.e., (a) boosting recovery, (b) tackling poverty and building resilience, and (c) driving green economic growth.

The 5-year Sukuk transaction was announced to the market on Monday, 10 March, with Initial Pricing Thoughts (IPTs) at US SOFR Mid Swap (SOFR MS) plus 56 basis points (bps) area. Despite the competing supply from peers across tenors, the investor demand was supportive from the outset resulting in the strong Indications of Interest (IOIs), that exceeded US$ 1.4bn.

The orderbook officially opened the following morning, on Tuesday, 11 March, with guidance set at SOFR MS plus 55bps area. Investor demand continued to grow above US$ 2bn allowing the Bank to set the final spread at SOFR MS plus 54 bps, i.e. two bps tighter from IPTs. The high-quality investor base enabled the Bank to raise a final size of US$ 1.75bn. This Sukuk issuance will result in a profit rate of 4.211% 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 58% of the book, followed by Banks and Private Banks (37%) and Asset/Fund Managers (5%). The Bank’s investor marketing activity and credit standing was once again rewarded with new investors that will continue to support future Sukuk issuances. Final allocations were well diversified, with 40% from the Middle East and African, 29% from the UK and Europe, 19% from Asia and 12% from Offshore US.

Dr. Zamir Iqbal, the Vice President (Finance) and CFO of IsDB, said: “We are delighted with the overwhelming investor response to our first transaction of 2025, despite the volatile market conditions. 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.”

Mr. Mohammed Sharaf, the IsDB Treasurer and Mr. Zakky Bantan, the Manager of the Capital Markets Division added, “This Sukuk issuance marked another important milestone for the Bank, as it continues to expand its investor base and achieve a lower overall pricing. We extend our thanks to all investors for their trust and to the joint lead managers for their diligent work on this endeavor.”

About Islamic Development Bank (IsDB) Group 

Rated AAA by the major rating agencies of the world, the Islamic Development Bank is the pioneering multilateral development bank (MDB) of the Global South that has been working for over 50 years to improve the lives of the people and communities it serves by delivering impact at scale. The Bank brings together 57 Member Countries across four continents, touching the lives of nearly 1 in 4 people worldwide. It is committed to addressing development challenges and promoting collaboration to help achieve the United Nations Sustainable Development Goals (SDGs) by equipping people to drive their own green economic and sustainable social progress, putting planet-friendly infrastructure in place and enabling them to fulfil their potential. Headquartered in Jeddah, Kingdom of Saudi Arabia, IsDB has 10 regional hubs and a center of excellence.  Over the years, the Bank has evolved from a single entity into a group comprising: the Islamic Development Bank (IsDB), the Islamic Development Bank Institute (IsDBI); the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC); the Islamic Corporation for the Development of the Private Sector (ICD); the International Islamic Trade Finance Corporation (ITFC); and the Islamic Solidarity Fund for Development.