Islamic Development Bank issues Sukuk securities

The transaction marked the first time that an issuance programme, similar to an EMTN programme, has been established for Islamic Sukuk (securities). Deutsche Bank acted as a joint arranger on the programme.

IDB, a "AAA" rated institution owned by 56 sovereign countries, is focused on socio-economic programmes in its member countries, and also in promoting the development of Islamic Banking and Finance. It operates in adherence to Islamic principles and it raised financing from the international capital markets in the form of Sharia compliant Sukuk (Certificates).

The order book for IDB's Sukuk was oversubscribed by 1.56 times by both Islamic and conventional investors. Investors were geographically diverse, with over 26% of the deal placed in Europe, 35% in Asia and a little over 31% going to the Middle East. Based on the strong interest in IDB paper, the deal was priced at the lower end of initial guidance, at 12 basis points over USD 6 month Libor.

Firas Chakra, a Director at Deutsche Bank, said: "This Trust Certificate Issuance Programme by IDB is the first of its kind, and will be a key driver of the further development of Islamic financing on a global basis by successfully introducing Islamic financing transactions to the international investor base."

"This deal demonstrates that Islamic issuers can achieve competitive funding levels by attracting conventional investors outside of the Middle East."