RIYADH: Saudi-based Islamic Development Bank (IDB) will most likely delay a $500 million Islamic bond issuance, or sukuk, until early September, IDB’s treasurer said on Monday.
“The bank has not taken a decision yet but will most likely postpone the issuance until the first week of September as legal documents are not yet complete and due to the impending summer vacations,” Mohammad Tariq told Reuters. On July 8, Tariq said IDB would decide within two weeks on a roadshow in the Middle East, Far East and Europe. He said on Monday that the sukuk may still be issued next week.
HSBC Plc, Deutsche Bank and BNP Paribas are lead arrangers with Malaysia’s CIMB and Brunei Islamic Bank co-arrangers for the Sukuk.
The maturity date for the $500 million sukuk will be either three or five years and will be decided, along with the pricing of the Sukuk, depending on the investor base, the bank has said.
The bank could raise the size of a $500 million Islamic bond depending on market conditions, Tariq said earlier this month.
The Saudi-based triple-A rated lender plans to issue the sukuk as part of a $6 billion Islamic bond program to soften the impact of the financial downturn on its members, which include some of the world’s poorest nations.
State and corporate issuers in the Gulf, the world’s largest oil exporting region, have raised more than $8 billion by issuing bonds over the last three months.
Many are eyeing further sales as demand rises for high-rate emerging market debt and governments look to boost infrastructure spending to shelter the region’s economy from the global financial crisis.
Last week, Ras Al-Khaimah, a member of the United Arab Emirates, priced its $400 million sukuk at a fixed coupon of 8 percent.