Al Rajhi Bank, the largest Islamic lender in the world, has raised $1 billion from sale of 5-year sustainable Islamic Bonds or 'sukuk', an arranging bank document showed on Tuesday.

The spread for the U.S. dollar-denominated sukuk was narrowed to 90 basis points (bps) over U.S. Treasuries from 120 bps earlier after orders topped $2.8 billion, the document said.

The Islamic lenders had hired Al Rajhi Capital, ADCB, ADIB, Citigroup Global Markets, DIB, Emirates NBD Capital, FAB, Goldman Sachs International, HSBC Bank, KFH Capital Investment, SMBC Nikko Capital Markets, Société Générale and Standard Chartered Bank as joint lead managers & bookrunners for the debt transaction, the document added.

Standard Chartered Bank was also acting as sole sustainability structurer.

Proceeds from the debt sale will be used to fulfill the bank’s financial and strategic objectives as per a sustainable finance framework, the lender disclosed in a bourse filing.

Last month, Saudi Arabia's sovereign wealth fund Public Investment Fund also raised $2 billion from 7-year sukuk sale.

(Reporting by Mohammad Edrees; Editing by Kim Coghill)