KIB co-manager for IsDB’s first-ever $1.5 billion ‘Sustainability Sukuk’
Sukuk will help tackle the aftermath of COVID-19 pandemic
KUWAIT: Kuwait International Bank (KIB) announced that it recently acted as co-manager for the successful issuance of ‘Sustainability Sukuk’ by the Islamic Development Bank (IsDB). Valued at $1.5 billion for a period of five years, the Sukuk seeks to mitigate the effects of the coronavirus pandemic (COVID-19) for IsDB member states.
Issued under the umbrella of IsDB’s Trust Certificate Issuance programme, which is in turn valued at $25 billion, the Sukuk is priced at par with a profit rate of 0.908 percent - to be payable on a semi-annual basis. Moreover, this marks the second such public issuance undertaken by IsDB in 2020.
The Joint Lead Managers and Joint Bookrunners for this issuance included Citi, Credit Agricole CIB, Emirates NBD, GIB Capital, HSBC, Islamic Corporation for the Development of the Private Sector (ICD), NATIXIS, Societe Generale CIB and Standard Chartered Bank. The Trust Certificates will be listed on Euronext Dublin, NASDAQ Dubai and Bursa Malaysia (under the Exempt Regime).
Commenting on the occasion, Jamal Al-Barrak, General Manager of KIB’s Investment Department said, “We are extremely pleased to serve as comanager for this one-of-a-kind issuance, which is also the first-ever AAArated ‘Sustainability Sukuk’ in the global capital markets and the first sukuk dedicated to combating the aftermath of coronavirus pandemic. We believe this crucial move will go a long way towards fortifying KIB’s position in the international investment market, while strengthening our ties with IsDB.” It also serves to note that IsDB itself is rated Aaa / AAA / AAA by Moody’s, Standard & Poor’s and Fitch respectively, all with a stable outlook.
The proceeds from the debut ‘Sustainability
Sukuk’ will be exclusively deployed by IsDB towards social impact projects under its Sustainable Finance Framework, with a focus on ‘access to essential services’ and ‘SME financing and employment generation’ for its 57-member states, aimed at assisting them in tackling the aftermath of the COVID-19 pandemic. The sukuk is one of the many initiatives undertaken by IsDB as part of its wide-ranging response to COVID-19, which so far has been pillared on ‘Respond, Restore and Re-start’. Al-Barrak also pointed out that KIB is consistently seeking opportunities to participate in various financial deals that help enhance its investment capabilities, while achieving sustainable development that supports local economy. “We believe that our participation in initiatives such as the ‘Sustainability Sukuk’ will serve as vital instruments when it comes to aiding SMEs, in addition to upholding KIB’s commitment to youth empowerment and employment generation, especially in light of the difficult times the country has recently experienced due to the economic recession caused by the pandemic,” he concluded.
It is important to note that IsDB is a dynamic multilateral financial development institution undertaking the task of sustainable development in its Member Countries and for Muslim communities worldwide. The bank’s mandate is to provide infrastructure support that enables people to realize their full potential, paving the way for a better life.