JEDDAH: Saudi-based Islamic Development Bank (IDB) plans to issue Islamic bonds, or sukuk, in the first half of 2010 worth around $850 million, a senior official said on Thursday.
“The size will be determined by the demand for resources (from member countries)... I am expecting it to be within the same size of the previous issuance,” Abdul-Aziz Mohamed Al-Hinai, Vice President of IDB, said.
In September IDB, the Saudi based triple-A lender, which funds projects in Muslim member countries, sold the first tranche of a $1.5 billion sukuk, a $850 million sukuk which was priced at 40 basis points over mid-swaps.
“Definitely the pricing change is on the positive side so we are aiming of getting an even better pricing than the last sukuk,” Al-Hinai said.
The bank is issuing sukuk as part of a $6 billion Islamic bond program to soften the impact of the financial crisis on its 56 member countries, many of them are poor. In 2008, it granted loans to poorer member states worth $4.8 billion.
A road show for the new sukuk would target Asian markets such as China and Japan as the Middle East and some Western countries, he said, without being more specific.
“We are studying the currency, tenure, and the place of issuance. Because in the past we have issued in non-member countries ... we hope that it will be in one of the member countries (this time),” Al-Hinai said.
