IsDB Raises $1bn from Capital Markets Through First Sukuk Issuance of 2026

Sunday Okobi

The Islamic Development Bank (IsDB) has raised US$ 1 billion through a benchmark Sukuk issuance in the capital markets.

They stated that after several weeks of closely monitoring the markets, the transaction was executed in a constructive market backdrop, with positive headlines following the volatile market period witnessed since March.

The US Dollars-denominated Sukuk transaction marks the Bank’s first US$ benchmark issuance this year, following the significant milestones achieved in 2025, which saw three successful public benchmark transactions across USD and EUR markets.

According to a statement issued and made available to THISDAY by its Communication Director, Ahmed Ghazeleh, 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 statement noted that the Joint Lead Managers for the issuance were Bank of China, BMO Capital Markets, BNP Paribas, ICBC, J.P. Morgan Securities plc, KIB Invest, Nomura, Standard Chartered Bank, and Warba Bank.

The 5-year Sukuk transaction was announced to the market yesterday with Initial Pricing Thoughts (IPTs) at US$ SOFR Mid Swap (SOFR MS) plus 55 basis points (bps) area.

Supported by a more constructive market backdrop, IsDB received strong investor demand from the very outset with high-quality and well-diversified Indications of Interest (IOIs), in excess of US$ 1.1bn (excluding JLM interest) at market open on May 7.

“As a result of the strong IOIs and the risk on tone at the open, the Bank was able to open books with a revised guidance of US$ SOFR MS plus 54 bps area on May 7. Despite the price revision, books continued to grow swiftly with a large degree of high-quality orders from international investors. “As a result of this strong momentum, coupled with stable yields and swap spreads, the orderbook grew in excess of USD 2.15billion. This allowed the Bank to set final terms less than three hours after opening books with a spread at SOFR MS plus 52 bps, i.e., three bps tighter than IPTs and set final size at USD 1billion – achieving the Bank’s size and pricing aspirations.

“There was minimal attrition as orders kept flowing, closing in excess of USD 2.65billion, making this transaction the Bank’s joint-largest USD Sukuk Benchmark orderbook ever (oversubscribed by 2.65 times). With the spread set, the Sukuk will result in a profit rate of 4.227 percent for investors, payable on a semi-annual basis and priced at par,” it stated.

Ghazeleh added in the statement that the transaction attracted strong participation from Central Banks and official institutions,s accounting for 49 percent of the book, followed by Banks, and Private Banks (42%), and Asset/Fund Managers (9%). Final allocations were well diversified, with 52% from the Middle East and Africa, as well as a high degree of participation from international investors, including 24% from Asia, 19% from the UK and Europe, and 5% from Offshore US.

According to him, “The proceeds of the Sukuk issuance will be deployed towards much-needed project financing across the Bank’s eligible Member Countries, and underpinned by the Bank’s Strategic Framework that delivers sustainable socio-economic growth for all.

“The transaction highlights the credit strength and deep investor relationships of IsDB, achieving their transaction goals despite geopolitical volatility.”

The Officer-in-Charge, Vice President (Finance) and CFO of IsDB, Dr. Abdourrabih Abdouss, said in the statement that: “We are thrilled with the level of interest from investors for our first transaction of 2026, especially amidst the complex geopolitical landscape and market volatility. The participation of both longstanding and new investors from around the globe underscores the Bank’s solid credit standing and compelling returns for investors. We thank all investors for their continued support.”

Also, Mr. Mohammed Sharaf, the IsDB Treasurer, and Mr. Zakky Bantan, the Head of Funding, added: “This Sukuk issuance represents a further key step forward for the Bank, helping us broaden our pool of investors while securing a more competitive pricing structure. We sincerely appreciate the confidence placed in us by our investors, especially in these more challenging circumstances, and commend all the joint lead managers for their meticulous execution of this project.”

IsDB is a AAA-rated supranational and multilateral development financial institution with 57 Member Countries (MCs), including Nigeria, 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 1 in 5 of the global population.

It stated that 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.