The Islamic Development Bank (IsDB) has raised US$1.5 B through its second benchmark sukuk issuance of the year. The USD-denominated sukuk transaction follows its highly successful first US$ benchmark earlier in May.
The bank, rated Aaa/AAA/AAA by S&P, Moody’s and Fitch (all with 'Stable Outlook') priced the five-year trust certificates under its US$25 B Trust Certificate Issuance Programme.
The joint lead managers for this issuance were Bank of China (BOC), Barclays, BMO Capital Markets, China International Capital Corporation (CICC), Goldman Sachs International, HSBC, Industrial and Commercial Bank of China (ICBC), KFH Capital, NATIXIS, Société Générale.
The bank transaction was announced on 1 September with initial pricing thoughts (IPTs) at US$ secured overnight financing rate (SOFR) mid swap (SOFR MS) plus 50 basis points (bps) area. Despite market volatility, strong investor demand helped the bank build indications of interest (IOIs) in excess of ~US$2 B at market open on 2 September.
On the back of this strong momentum, the bank opened the books, revising guidance to US$ SOFR MS plus 48 bps area and continued to attract high-quality orders from institutional investors. At 12 pm London time, the order book had been valued in excess of US$2.75 B, surpassing the previous highest amount of US$2.65 B that the bank achieved in May 2026.
The bank maintained the level and set final terms with a spread at SOFR MS plus 48 bps, i.e. two bps tighter than IPTs and set final size at its target US$1.5 B. This led to the profit rate for the sukuk being set at 4.781% for investors, payable on a semi-annual basis and priced at par.
The transaction attracted strong participation from central banks and official institutions accounting for 51% of the book, followed by banks and private banks (38%) and asset/fund managers (12%). Final allocations were well diversified, with 39% from the Middle East and Africa, as well as a high degree of participation from international investors, including 13% from Asia.
The bank will deploy the proceeds of the sukuk issuance towards project financing across the bank’s eligible member countries in line with its Strategic Framework, which delivers sustainable socioeconomic growth for all.