UAE-based banks took lion's Share in the IDB USD400 million debut Sukuk issue

Addressing senior dignitaries during a commemorative lunch in Abu Dhabi, including His Excellency Sheikh Nahyan bin Mubarak al-Nahyan, the Minister of Higher Education & Scientific Research of the UAE, His Excellency Musalam Saeed Abdullah Al Qubaisi, Director, Abu Dhabi Islamic Bank and Mr. Abdul Rahman Abdul Malik, CEO of Abu Dhabi Islamic Bank, Dr. Ali said, "IDB carries a special gratitude to the financial institutions in the U.A.E. for taking the lion's share, over one third of the Sukuk issue, which translates into approximately US$150 million. It is projected that in order to maintain an annual growth rate of 7% in its operations, the IDB will have to raise no less than US$ 4 billion over the next 10-years. In other words the IDB, will, inshallah, be going back to the market very soon."

The US$400 million Sukuk issue is considered the first international Islamic capital markets bond issue by a non-sovereign and only the second such international Islamic issue. Citigroup acted as Ratings Advisor, Sole Bookrunner and Lead Manager on the transaction with Abu Dhabi Islamic Bank and Kuwait Finance House acting as co-lead managers. Co-managers on the transaction were HSBC and Nomura..

Referring to IDB's efforts to promote Islamic finance within member countries and the utilization of the proceeds from the Sukuk, IDB president said, "IDB has been cooperating with a number of central banks in member countries to develop an international Islamic finance market for the trading of Islamic financial instruments which is a key requirement for the success and continuity of the Islamic banking industry...you would certainly be gratified to know that the money recently mobilized from the Sukuk issue will go to a number of member countries to finance development projects in a variety of sectors, including energy, industry, communications and transportation." Apart from the UAE Central Bank, central banks of Saudi Arabia, Malaysia, Pakistan, Bahrain, Qatar and Bangladesh took part in the Sukuk issue

Mr. Anthony Nelson, Vice Chairman of Citigroup, Europe said, "in a challenging global environment, IDB has taken a bold step in integrating Islamic Finance with the global capital markets...Citigroup has been privileged to be associated with this transaction to help IDB in its efforts to foster economic developments and social progress in member countries."

Mr. Shehzad Naqvi, Regional Director of Middle East for Citigroup emphasized the significance of this issue given that it is the first ever AAA issue by any borrower in the Organization of Islamic Countries (OIC). "We certainly would like to continue to work with the IDB, the central banks and finance ministries of OIC member countries and other key Islamic financial institutions to introduce innovative Islamic structures. We believe that the international financial institutions have a critical role in promoting Islamic finance beyond its traditional borders."

The IDB Sukuk issue was originally targeted for US$ 300 Million. However due to strong demand from institutional investors, the size was increased to US$ 400 Million, limited only by the availability of underlying assets that formed the asset pool against which the bonds were issued.