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