Islamic Finance

Islamic Corporation for the Development of the Private Sector hires banks to arrange US dollar sukuk

The Islamic Corporation for the Development of the Private Sector (ICD) has hired banks to arrange a five-year US dollar denominated sukuk, according to a document from one of the banks on the deal seen by Salaam Gateway.

ICD is a unit of the Islamic Development Bank (IDB).

It has mandated Goldman Sachs International, HSBC and Standard Chartered as the global coordinators. They will be joined by Bank ABC, Boubyan Bank, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, Gulf International Bank, Goldman Sachs International, HSBC, the ICD, KFH Capital, LBBW, Mizuho Securities, Samba Capital, SMBC Nikko, Standard Chartered Bank and Warba Bank as joint lead managers and joint bookrunners.

On Monday (October 5), the Shariah-compliant multilateral development financial institution began a series of calls with global and fixed-income investors across Asia, the Middle East and Europe.

The calls are continuing today, according to a source close to the deal.

Pricing for the benchmark senior unsecured Shariah-compliant debt would be tomorrow’s business (October 7), according to the same source.

Benchmark size usually refers to at least $500 million.

The latest notes will fall under ICD Sukuk Limited’s Trust Certificate Issuance Programme.

ICD has a $300 million 2.468% sukuk maturing on April 13, 2021. Bank ABC, Boubyan Bank, CIMB, Dubai Islamic Bank, Emirates NBD Capital, First Gulf Bank, HSBC, Mizuho, Societe Generale and Standard Chartered arranged the deal in April 2016.

ICD is rated A by S&P Global Ratings, A+ by Fitch and A2 by Moody’s.

Last month, Fitch downgraded ICD’s credit rating from AA- to A+. Among the reasons include the ICD’s non-performing loan (NPL) ratio increased to 14.7% at end-2019 compared to 13% at end-2018. Nonetheless, Fitch maintained that the ICD maintains key support from its key shareholders, namely the Islamic Development Bank which is rated AAA by the rating agencies.

(Reporting by Hassan Jivraj; Editing by Emmy Abdul Alim

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