The Islamic Development Bank (IsDB) closed its first global debt issuance of the year, raising USD 1.75 bn in a USD-denominated sukuk sale as part of its USD 25 bn Trust Certificate Issuance Program, according to a press release. The offering pushed the bank’s total issuance volume beyond the USD 50 bn mark and saw participation from a broad investor base, including buyers from the Middle East, Europe, Asia, and offshore US accounts.

Where will the money go? IsDB said it will use proceeds from the debt sale to finance its social and economic development projects and initiatives in some 57 member countries.

About the offering: The five-year issuance was priced at par, meaning the coupon rate and yield are identical. It offers a fixed annual return of 4.211% paid in two equal semi-annual installments and is structured under the wakalah format.

ICYMI- The Jeddah-based multilateral lender raised USD 2 bn from its first benchmark sukuk issuance last year, which was priced at a fixed annual yield of 4.754%, before closing two more FCY sukuk sales later last year, lining up USD 1.25 bn and EUR 500 mn in October 2024.

IN CONTEXT- Global sukuk issuances are forecast to hit USD 190-200 bn this year, despite the spillover of geopolitical volatility in key sukuk markets. As global liquidity conditions improve, FCY-denominated sukuk are set to account for USD 70-80 bn of the total volume this year, compared to USD 72.7 bn in 2024.

ADVISORS- BNP Paribas, Crédit Agricole CIB, Dubai Islamic Bank, GIB Capital, HSBC, KFH Capital, Nomura, Santander, and SMBC served as joint lead managers for the issuance.

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