IDB sukuk a confidence vote for BIBD
BIBD chief: Javed Ahmad, managing director of BIDB which was co-lead manager for a recent global sukuk issue. Picture: BT/Rudolf Portillo
Thursday, October 1, 2009
BANK ISLAM BRUNEI DARUSSALAM (BIBD) was chosen as one of the lead managers for Islamic Development Bank's (IDB) US$1.5 billion sukuk programme because of its ability to distribute the bonds to the widest possible institutional investor base in Asia, its acting managing director said.
In a written response to The Brunei Times yesterday, Javed Ahmad said: "As the IDB was looking to distribute the Sukuk to Asia, Middle East and Europe, they selected lead managers with strength in each of their respective markets. For Asia, both BIBD and CIMB were selected to distribute the sukuk to the widest possible institutional investor base."
BIBD and Malaysian-based CIMB were mandated alongside BNP Paribas, Deutsche Bank and HSBC last July to manage and distribute US$1.5 billion worth of Islamic bonds under IDB's sukuk programme.
A US$850 million ($1.2 billion) five-year sukuk launched by the multilateral bank under the programme last month was more than twice oversubscribed owing to a roadshow in Asia, Middle East and Europe. The order book, worth US$2 billion, was 2.4 times oversubscribed with 90 orders.
The five-year fixed sukuk was priced at par with a 3.172 per cent semi-annual profit rate to yield 40 basis points (bps) over five-year mid-swaps and 77bps over five-year benchmark US Treasuries, respectively.
Investor distribution was diversified with over 60 per cent of the bonds placed outside the Gulf Cooperation Council region. Asian investors accounted for 37 per cent, European investors 24 per cent, GCC 37 per cent and others two per cent.
Proceeds of the Islamic bond offer will be partly used to help IDB member countries struggling to cope with the impact of the global financial downturn as well as the rise in commodity prices. At least 25 of the 56 IDB member states are classified as least-developed countries.
"The success of the sukuk has provided valuable experience to the BIBD team to work on other transactions, both domestic and international," Javed said.
BIBD, the lead manager and underwriter of the first corporate sukuk issued in the Sultanate in 2006, is one of the most active investors in the Brunei sovereign sukuk issues, he added. BIBD was also the lead arranger for the BLNG sukuk distributed to individual investors in Brunei in Aug 23, 2006.The Brunei Times
In a written response to The Brunei Times yesterday, Javed Ahmad said: "As the IDB was looking to distribute the Sukuk to Asia, Middle East and Europe, they selected lead managers with strength in each of their respective markets. For Asia, both BIBD and CIMB were selected to distribute the sukuk to the widest possible institutional investor base."
BIBD and Malaysian-based CIMB were mandated alongside BNP Paribas, Deutsche Bank and HSBC last July to manage and distribute US$1.5 billion worth of Islamic bonds under IDB's sukuk programme.
A US$850 million ($1.2 billion) five-year sukuk launched by the multilateral bank under the programme last month was more than twice oversubscribed owing to a roadshow in Asia, Middle East and Europe. The order book, worth US$2 billion, was 2.4 times oversubscribed with 90 orders.
The five-year fixed sukuk was priced at par with a 3.172 per cent semi-annual profit rate to yield 40 basis points (bps) over five-year mid-swaps and 77bps over five-year benchmark US Treasuries, respectively.
Investor distribution was diversified with over 60 per cent of the bonds placed outside the Gulf Cooperation Council region. Asian investors accounted for 37 per cent, European investors 24 per cent, GCC 37 per cent and others two per cent.
Proceeds of the Islamic bond offer will be partly used to help IDB member countries struggling to cope with the impact of the global financial downturn as well as the rise in commodity prices. At least 25 of the 56 IDB member states are classified as least-developed countries.
"The success of the sukuk has provided valuable experience to the BIBD team to work on other transactions, both domestic and international," Javed said.
BIBD, the lead manager and underwriter of the first corporate sukuk issued in the Sultanate in 2006, is one of the most active investors in the Brunei sovereign sukuk issues, he added. BIBD was also the lead arranger for the BLNG sukuk distributed to individual investors in Brunei in Aug 23, 2006.The Brunei Times
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