Friday, September 19, 2014

IDB raises international profile, achieves tightest pricing for US$1.5 billion global Sukuk


Islamic Finance news Alert

Friday, 19th September 2014

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GLOBAL: In a succession of eminent Sukuk deals closed over the last few months, the Islamic capital markets continue their robust momentum as ‘AAA’-rated Islamic Development Bank (IDB, the premier supranational development agency for the industry) prices its US$1.5 billion Sukuk this week.

At 10bps over, the multilateral institution achieved its tightest spread ever, indicating not only exceptional demand for the IDB papers but a trend for the overall market, which has seen pricing tighten significantly over recent deals. Speaking exclusively to IFN, the regional head of debt capital markets MENAP for Standard Chartered, Salman Ansari, commented that: “The issuance achieved the tightest ever pricing spread for IDB at MS+10bps, considerably inside the prevailing secondary levels.”

Jointly arranged by CIMB, Deutsche Bank, First Gulf Bank, GIB Capital, HSBC, Maybank, Natixis, National Bank of Abu Dhabi and Standard Chartered, the five-year debt was given initial price thoughts of 15bps with previous guidance in the range of 10-15bps.

“Standard Chartered Bank is delighted with the outcome of the deal, which achieved the issuer’s objectives to build on the success of the deal in February 2014 in order to establish another liquid benchmark and further position IDB in line with its supranational peer group," said Salman.

In line with the IDB’s plan to come to market annually, this program marks its fourth this year. In February the bank marketed its largest public transaction valued at US$1.5 billion, followed by two privately placed facilities – a US$100 million three-year program in April and a US$1 billion five-year facility in July (the largest deal privately placed by the IDB). Carrying a profit rate of 2.11%, the response for the facility has been encouraging, with approximately US$2 billion in orderbook registered. Salman further elaborated: "The success of the transaction is also underpinned by a high-quality and diversified orderbook, including a number of first time investors in the IDB credit.”

The senior unsecured Sukuk will be triple-listed: on the exchanges of NASDAQ Dubai, London Stock Exchange and Bursa Malaysia.



US: An IFN Correspondent Report


Goldman Sachs gets back in the Sukuk business
In a landmark offering made on the 16th September 2014, Goldman Sachs became the first US bank to issue Sukuk. Sources say the New York-based lender attracted bids for three times the US$500 million of Sukuk it sold. The five-year Sukuk was priced to yield 90bps, or 0.9 percentage point, over the benchmark midswap rate.
IFN Global Trendswatch


Today's IFN Alerts


MALAYSIA: 1MDB plans world's largest Sukuk offering worth RM8.4 billion (US$2.6 billion)

SOUTH AFRICA: South Africa issues US$500 million sovereign Sukuk

INDONESIA: Indonesia in the midst of preparing draft regulations for Islamic pension funds

GLOBAL: World Bank's International Finance Corporation to acquire 15% stake in Bank Alfalah

GLOBAL: Qatar's Ezdan Holding working on establishing an Islamic bank in Tajikistan

MALAYSIA: Corporate Sukuk market to gather momentum buoyed by Malaysia's exceptional GDP growth in the first half, says RAM

MALAYSIA: RHB Research expects Bank Negara Malaysia to maintain overnight policy rate at 3.25% given drastic slowdown in exports and production

SAUDI ARABIA: Effat University introduces Saudi Arabia's first executive master's degree in Islamic finance

JORDAN: Jordan Islamic Bank makes cash contribution in support of local school's renewable electric project

MALAYSIA: MNRB Holdings reports higher revenue driven by Takaful contributions

MALAYSIA: Sun Life Malaysia Takaful strikes bancaTakaful deal with Bank Rakyat, targets RM150 million (US$46.91 million) premium

LUXEMBOURG: S&P assigns 'AAA' rating to Luxembourg's Sukuk

GLOBAL: RAM maintains 'AA2' rating on Development Bank of Kazakhstan's RM1.5 billion (US$469.15 million) Sukuk Murabahah program

SAUDI ARABIA: Mohammed Saad Dawud resigns from SABB Takaful board














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