The Islamic Development Bank (IsDB) has raised US$1.5 billion through its second benchmark Sukuk issuance of 2026, successfully accessing the international Islamic capital markets amid challenging market conditions and geopolitical uncertainty.
The five-year, US dollar-denominated Sukuk was issued under IsDB’s US$25 billion Trust Certificate Issuance Programme. The Bank, which holds Aaa/AAA ratings from Moody’s, S&P and Fitch, all with Stable Outlooks, attracted strong demand from a broad range of international institutional investors.
IsDB announced the transaction on September 1, with initial pricing guidance set at approximately SOFR mid-swap plus 50 basis points. Investor interest was strong from the beginning, with indications of interest exceeding US$2 billion when the market opened on September 2. The Bank subsequently opened the order books with revised guidance of approximately SOFR mid-swap plus 48 basis points.
By midday London time, the order book had exceeded US$2.75 billion, surpassing the previous high of US$2.65 billion recorded by the Bank in May. Strong demand enabled IsDB to maintain the tighter pricing guidance and finalize the transaction at SOFR mid-swap plus 48 basis points, two basis points tighter than the initial guidance.
The Sukuk was priced at par with a profit rate of 4.781%, payable to investors on a semi-annual basis. The final issuance size was set at US$1.5 billion, in line with the Bank’s targeted amount.
Central banks and official institutions accounted for the largest share of the order book at 51%, followed by banks and private banks with 38%, while asset and fund managers represented 12%. The final allocation was geographically diversified, with 39% allocated to investors in the Middle East and Africa, 36% to the UK and Europe, 13% to Asia and 12% to offshore US investors.
The proceeds from the Sukuk will be used to finance projects across IsDB’s eligible member countries, supporting initiatives aligned with the Bank’s strategic framework for sustainable socioeconomic development.
Dr. Abdourrabih Abdouss, Officer-in-Charge, Vice President (Finance) and CFO of IsDB, said the successful transaction demonstrated the Bank’s strong credit profile and the continued confidence of both existing and new investors. He also emphasized the importance of the support provided by the Bank’s member countries and the attractiveness of IsDB’s Sukuk to international investors.
The transaction was arranged by Bank of China, Barclays, BMO Capital Markets, China International Capital Corporation, Goldman Sachs International, HSBC, Industrial and Commercial Bank of China, KFH Capital, NATIXIS and Société Générale.
The latest issuance represents another step in IsDB’s 2026 funding programme and highlights continued investor appetite for high-quality Shariah-compliant securities. The strong order book and competitive pricing further reinforce IsDB’s position as a major issuer in the international Sukuk market.