Islamic Development Bank hires banks for dollar sukuk - document

Islamic Development Bank has hired banks for a potential sale of U.S. dollar-denominated five-year sukuk

  
An engraved logo of the Islamic Development Bank Group is seen at the door of the bank in Jeddah, Saudi Arabia May 31, 2018.

An engraved logo of the Islamic Development Bank Group is seen at the door of the bank in Jeddah, Saudi Arabia May 31, 2018.

REUTERS/Reem Baeshen

DUBAI- Jeddah-based Islamic Development Bank has hired banks for a potential sale of U.S. dollar-denominated five-year sukuk, or Islamic bonds, a document showed on Monday.

The triple-A rated financial institution has mandated Citi, Credit Agricole, Emirates NBD Capital, Gulf International Bank, HSBC, the Islamic Corporation for the Development of the Private Sector, Natixis, Societe Generale and Standard Chartered to arrange the issuance, subject to market conditions.

IsDB will use the money raised to fund sustainable projects, including employment generation and financing small and medium enterprises, as well as to support education programmes, according to an investor presentation seen by Reuters.

IsDB has already launched a plan for the coronavirus pandemic that includes strengthening healthcare systems, building capacity to produce testing kits and vaccines, ensuring continuity of supplies in the health and food sectors supporting overall economic recovery, the presentation showed.

The bank's approved funding for 2020 is $5.5 billion, more than half of which has been secured.

The bulk of IsDB's issuances have been in dollars or euros, which it will continue to tap while rates are attractive. But in future it also aims to issue in other currencies; in February it placed its first Chinese yuan issuance privately.

S&P Global Ratings said in a report on Monday that, after a strong performance in 2019, the global Islamic finance industry would grow slowly this year and next due to government measures to curb the spread of the coronavirus.

"At the same time, we see an opportunity in the current environment for accelerating and unlocking the long-term potential of the industry," the ratings agency said.

(Reporting by Yousef Saba; Editing by Davide Barbuscia and Kevin Liffey) ((Yousef.Saba@thomsonreuters.com; +971562166204))

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