International Finance Corporation’s sukuk pricing revealed

23 October 2009

Sukuk will be issued by 20 October

The International Finance Corporation’s (IFC) $100m sukuk will be priced between 35-40 basis points above the yield on US Treasuries, according to sources close to the deal.

The subsidiary of the World Bank held the final day of a sukuk roadshow on 20 October and started bookbuilding for the debt issue on the same day.

The IFC expects to complete the debt issue by 26 October.

The agency, which invests in private-sector projects in developing countries with the intention of reducing poverty, has taken its debt roadshow to Riyadh, Abu Dhabi and Dubai in an attempt to attract some of the region’s wealthiest investors.

“The roadshow has gone very well and we expect to get a very positive response from the market. This is only a small issue so it should get a very good subscription,” says one source close to the deal.

The IFC is launching the sukuk to help foster the development of the Islamic finance market.

“For the future development of this market, there needs to be some realistic benchmark transactions,” says the source.

The IFC will list its sukuk on Nasdaq Dubai and the Bahrain Stock Exchange. The IFC says it could issue more sukuk in the future.

The deal is being arranged by the UK’s HSBC, Dubai Islamic Bank, Kuwait Finance House, and its subsidiary Liquidity Management House. The sukuk is rated Aaa by ratings agency Moody’s Investors Service.

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