IDB more than doubles sukuk size to $3.5bn

Jeddah-based Islamic Development Bank (IDB) more than doubled the size of its Islamic bond (sukuk) on Sunday to finance its planned growth.

It increased the ceiling of its Sukuk Trust Certificate Issuance Program from $1.5 billion to $3.5 billion, an increase of 133 per cent.
The sukuk obtained the highest rating of “AAA” from S&P, Moody’s and Fitch.

“IDB wants to continue playing its pioneering and leadership role for the growth of Islamic capital markets. The philosophy of IDB core funding strategy rests on the principles of transparency, liquidity and superior performance. IDB aims is to position itself as a leading supranational issuer in capital markets, with a well-defined, transparent and liquid Sukuk yield curve and offering investors across the world an investment opportunity of the highest credit quality,” the bank said in a statement.Analyst say that Islamic bond issuances will accelerate in the Gulf region in the fourth quarter as economy continues growth and some companies reach agreements to restructure debt.

Dubai-based property developer Nakheel may issue as much as $3.2 billion of five-year Sukuk to pay contractors as part of its debt restructuring plan, JPMorgan Chase analyst Zafar Nazim said in a note in August.

Qatar Islamic Bank, the Gulf state's largest Shariah-compliant lender, on Thursday launched a $750 million five-year Islamic bond, or sukuk, which was heavily oversubscribed.

The multilateral development bank (MDB) and is based in Jeddah, Saudi Arabia. It was established in 1975 with the aim of fostering economic development and social progress, and provides project and trade finance as well as technical assistance to its member countries.

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