Islamic Development Bank (IsDB), rated Aaa/AAA/AAA by Moody’s, S&P and Fitch (all stable outlook), has successfully priced $1.5 billion, five-year, trust certificates (Sukuk) issued at par with a 2.111% semi-annual profit rate under its $10 billion Trust Certificate Issuance Programme.
CIMB, First Gulf Bank, GIB Capital, HSBC, Maybank, National Bank of Abu Dhabi, Natixis and Standard Chartered Bank acted as joint lead managers and joint bookrunners, with Bank of London and Middle East and NCB Capital as co-managers.
Book building began on Wednesday, 17 September with the release of initial price thoughts of MS plus 15bps area at 1:30pm London time on the back of which good momentum was built into the orderbook.
Despite an uncertain market environment in the backdrop of the FOMC and Scottish debate, IsDB achieved extremely attractive pricing, with the deal pricing approximately 10bps inside the secondary market levels.
“This is indeed a significant achievement and an evident outcome of IsDB’s continued efforts in positioning itself closer to its supranational peers. The success of IsDB’s transaction was underpinned by a comprehensive set of investors meetings across key hubs of Asia, Middle-East and Europe. IsDB’s AAA ratings, strong financial position and commitment to support the liquidity of its Sukuk, made a compelling story for investors who participated strongly in the book said,” the bank in a statement.
“The issue saw strong participation from investors across the Middle East, Asia and Europe. In terms of allocation, the distribution was well diversified with 59% allocated to MENA, 27% to Asia, and 14% to Europe, respectively. Overall the deal saw strong participation from real money accounts and official institutions providing credence to IsDB’s credit strength. 43% was allocated to central banks, followed by 34% to banks, 12% to fund managers and 11% to other investor types,” the statement, added.
The Trust Certificates will be listed on the London Stock Exchange, Nasdaq Dubai and Bursa Malaysia under an Exempt Regime.
“We are very delighted with the outcome of the deal, which achieved our main objectives for the transaction to build on the success of the deal in February 2014 in order to establish another liquid benchmark and further position IsDB in line with its Supranational peer group. I am particularly happy to see that the deal was placed into a high-quality and diversified orderbook, including a number of first time investors to the IsDB credit. In closing I would like to commend the lead managers for delivering a deal that has met all our objectives,” Dr. Abdul Aziz Hinai, Vice President, Finance who led the IsDB delegation for the road show, said.