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BANK'S STRONG RATING HELPS

IDB raises $1 billion from sukuk

Dubai, May 30, 2013

Islamic Development Bank (IDB), a Jeddah-based multilateral institution, raised $1 billion from the sale of a five-year Islamic bond, or sukuk, at par yesterday, overcoming a sell-off across global credit markets.

The senior, unsecured notes were priced at a profit rate of 1.535 per cent, arranging banks said.

The bank had earlier set final guidance for the issue at a spread of 30 basis points over midswaps.

Order books for the deal had reached just under $1.5bn ahead of launch.

The bank's strong credit rating - AAA - and substantial regional support may have made it immune from general market volatility.

Credit markets took a battering on Wednesday on the back of the biggest rise in treasury yields in a year the previous day. 

Improved housing data and strong consumer confidence, as well as hints from the Federal Reserve last week about a possible reduction in the asset purchase programme contributed to the sell-off.

IDB, whose largest shareholder is Saudi Arabia, has also more than tripled its authorised capital to $150bn to better support development projects in its 56-member nations. – Reuters




Tags: Jeddah | sukuk | IDB | Islamic Development Bank |

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