IsDB Mobilises US$1.2bn from Capital Markets with Second Public Sukuk Issuance of 2025

Sunday Okobi

The Islamic Development Bank (IsDB) has announced the mobilisation of US$1.2 billion through a benchmark Sukuk issuance in the capital markets.
The bank stated the transaction was successfully issued amid a volatile market period, demonstrating IsDB’s long-standing presence and strength in the US$ Sukuk market.

IsDB, 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 Vice President (Finance) and CFO of IsDB, Dr. Zamir Iqbal, in a statement, said: “Despite a particularly volatile market, we are extremely pleased with the successful close of our latest Sukuk issuance, which was upsized from US$1billion to US$1.2billion.

“This outstanding result is a testament to the strong confidence investors have in IsDB’s creditworthiness and our vital mission to foster sustainable development across our member countries. The proceeds will be instrumental in funding our strategic initiatives and supporting impactful projects globally.”

He noted the Sukuk transaction is its second US dollar benchmark issuance this year, following significant milestones achieved in 2024, which saw three successful public benchmark transactions across the Euro and USD markets, and the bank crossing the US$ 50 billion mark in total Sukuk issuances since it began issuing in 2003.

“The Joint Lead Managers for this issuance were BBVA, BMO Capital Markets, Citi, Emirates NBD Capital, Goldman Sachs International, NATIXIS, Societe Generale and Standard Chartered Bank.
“The Sukuk proceeds will be utilised to continue the bank’s support for project financing that delivers socio-economic growth across its 57 member countries and Muslim communities globally,” he stated.

IsDB chief further stated the 5-year Sukuk transaction was announced to the market on June 16, with Initial Pricing Thoughts (IPTs) at US SOFR Mid Swap (SOFR MS) plus 58 basis points (bps) area.

They added that despite competing supply from peers across tenors and heightened geopolitical crises, investor demand was supportive from the outset, resulting in strong Indications of Interest (IOIs) that exceeded USD 1.35 billion.

According to the bank, “The order book officially opened the following morning on Tuesday June 17, with guidance reiterated at SOFR MS plus 58 bps area.

“Investor orders continued to grow and held onto the orderbook, allowing the bank to set the final spread at SOFR MS plus 57 bps, translating into an overall profit rate of 4.246 percent payable on a semi-annual basis and priced at par. The high-quality investor base enabled the bank to upsize the transaction from an initially planned USD 1.0 billion to US$ 1.2 billion.
“The transaction attracted strong participation from Central Banks and Official Institutions, accounting for 59 percent of the book, followed by Bank Treasuries and Private Banks with 35 percent and Asset/Fund Managers 6 percent.

“The IsDB’s investor marketing activities and credit standing was once again rewarded with participation by new investors who invested for the first time.

“Final allocations were very well diversified, with 45 percent from the Middle East and North Africa, 34 percent from the UK and Europe, 20 percent from Asia and 1 percent from Offshore US.”

Meanwhile, in their remarks, Mr. Mohammed Sharaf, the IsDB treasurer and Mr. Zakky Bantan, the manager of the Capital Markets Division added that: “Our agile approach and the active and continuous engagement with investors has proven fruitful for a strong execution in these market conditions and achieving 80 percent of the bank’s funding programme for the year.

“Our sincere thanks go to all investors for their unwavering trust and to the joint book runners for their meticulous efforts in bringing this endeavor to fruition.”

The duo disclosed that IsDB is an AAA-rated supranational and multilateral development financial institution with 57 Member Countries (MCs) and a mandate of delivering social and economic development with a focus on sustainability in its member countries and Muslim communities worldwide.

 “The bank’s operations span across four continents, touching the lives of nearly one in five of the global population. Its mission is to equip people to drive their own economic and social progress at scale, putting the infrastructure in place and enabling them to fulfil their potential.

“The bank’s targeted efforts across multiple continents foster an environment where the primary focus is on human development and well-being,” the duo stated.