IDB to announce sukuk roadshow this week
The Islamic Development Bank (IDB) will announce this week plans for investor roadshows covering its planned sukuk sale, bankers familiar with the situation told Reuters. The issue, expected to be in excess of $1 billion, is one of the few remaining debt sales likely to be completed in the Middle East before the end of this year, as the window to prepare new bonds shrinks and as market volatility puts investors in a defensive mode, bankers and investors said.
The IDB did not respond to an emailed request to comment. It mandated nine banks for the Islamic bond sale in late October, with the aim of issuing the sukuk after the US elections on Nov 8.
But the unexpected victory of Donald Trump in the US presidential election last week caused the IDB - as well as other potential debt issuers in the Middle East - to wait a bit longer to assess the impact of Trump’s victory on the regional bond market, bankers said.
“The deal would have gone out earlier if Clinton had won,” said one. Some Middle Eastern bond transactions for which banks had already been mandated have been put on hold because of the market turmoil caused by Trump’s win, and new mandates for issues that could have taken place after a Clinton victory have been frozen, bankers said. Potential borrowers have decided to wait until January to see how markets perform. An interest rate hike by the US Federal Reserve Bank in December seems likely, and the market has already priced that in, “so what’s the advantage in issuing now rather than in January?” said the banker. —Reuters