Saudi Arabia''s Islamic Development Bank (IDB) has asked banks for proposals to arrange a US dollar-denominated sukuk, banking sources said on Sunday. The Jeddah-based multilateral development bank is a regular issuer of international Islamic bonds, which it raises to fund its business activities but also to promote the international sukuk market by building a liquid sukuk yield curve.
The new sukuk, which is likely to have a five-year maturity, could be issued in September or October, bankers said. The request did not indicate a specific size for the deal, but it is expected to range between $1 and $1.5 billion, they said. Banks were given a deadline of July 26 to respond to IDB''s request. Islamic Development Bank did not immediately respond to a request for comment. IDB, a triple A rated issuer, sold its latest sukuk last April, raising $1.25 billion in senior unsecured five-year notes with a 2.393 percent profit rate. Last November, it issued another $1.25 billion five-year Islamic bond with a 2.263 percent profit rate. IDB was founded in 1973 to back development in accordance with the principles of Islamic finance.