Capital Markets 197
CASE STUDY: ISLAMIC DEVELOPMENT BANK
On September 9, 2009, the Islamic Development Bank (IDB) launched
the following fi ve - year, US$850 million sukuk. This was the third, and
largest, public US dollar - denominated sukuk executed by IDB.Issuer IDB Trust Services Limited
Obligor Islamic Development Bank (IDB)
Currency/Format US$/Fixed Rate Regulation S
Structure Sukuk based on wakalah (agency) structure
Obligor/Sukuk Ratings Aaa/AAA/AAA
Sukuk Assets Portfolio of assets owned by IDB comprising
ijarah contracts, Shari’ah - compliant equity
instruments and/or sukuk certifi cates
Amount US$850 million
Pricing/Settlement Date 9 September 2009/16 September 2009
Maturity Date 16 September 2014
Periodic Distributions 3.172% semi - annual
Price/Re - offer Spread 100.00/MS+40bps
Listing London Stock Exchange
Governing Law English Law
Joint Lead Manager and
Joint BookrunnerHSBC AmanahTransaction Highlights■ (^) Book - building swiftly gained momentum with the announcement
of the price guidance of MS+40–43 bps, resulting in the order book
reaching US$2 billion, at 2.4x oversubscribed with 90 accounts
■ (^) The strong bid enabled the transaction to price at the tight end of
the price guidance, at a yield of 3.172 per cent
■ (^) Distribution was evenly spread geographically and by investor type,
thereby achieving IDB’s strategic objective of investor diversifi ca-
tion into Europe and Asia. Approximately 65 per cent of the issue
was place outside of the Middle East and North Africa region. The
issue saw strong distribution to central banks and reserve manag-
ers (21 per cent), with the balance taken up by banks (40 per cent),
fund managers (34 per cent) and private banks (5 per cent)