Landmark Sukuk of Islamic Development Bank closed by Emirates NBD Capital

Islamic Development Bank became the first AAA-rated institution to issue a Green Sukuk in November 2019.

By Rahul Vaimal, Associate Editor
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Emirates NBD Bank
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The investment banking arm of Emirates NBD, Emirates NBD Capital Limited, has successfully closed the Islamic Development Bank (IsDB)’s first-ever USD Sustainability Sukuk.

Emirates NBD acted as Joint Lead Manager and Bookrunner for the landmark deal by IsDB. The $1.5 billion, five-year Sukuk is a testimonial to IsDB’s long-standing dedication to prioritizing the UN Sustainable Development Goals, SDGs, in accordance with the specific development needs of its 57 Member Countries, MCs.

As a demonstration of this engagement, IsDB became the first AAA-rated institution (as well as first Middle East-based SSA) to issue a Green Sukuk in November 2019.

The returns of the Sustainability Sukuk issuance will be allotted in line with IsDB’s Sustainable Finance Framework (under the Social Projects Category), to support IsDB Member Countries in overcoming the consequence of the COVID-19 pandemic as part of IsDB’s $2.3 billion aid package for its member states, in response to the ongoing global pandemic.

The aid package, titled ‘Respond, Restore, Restart’ will assist recipient countries as they address the impact of COVID-19 pandemic on both healthcare systems and the economic impact on SMEs.

Fahad Abdulqader Al Qassim
CEO – Emirates NBD Capital

“Emirates NBD Capital has a long-standing relationship with IsDB and we are pleased to support this landmark Sustainability Sukuk that will support the recovery, growth and future development of communities across the world as they manage the impact of the ongoing COVID-19 pandemic. The transaction also demonstrates Emirates NBD’s growing capabilities in ESG related financing, an area which will only grow in importance and relevance as businesses across the globe seek to maintain their resilience during these challenging times and thrive in the future.”

The Sukuk was valued at a spread of 55bps over five-year USD Mid-Swaps for a final coupon of 0.908 percent per annum representing the lowest ever coupon for an IsDB Sukuk and was well subscribed by global investors with 37 percent allocated to Asia, 8 percent to Europe, 53 percent to the Middle East and 2 percent to Others.