Jeddah-based Islamic Development Bank (IsDB) has invited Bangladesh to subscribe to its second edition of Sukuk (Islamic bonds), officials said.
The bond is scheduled to be floated this month. Under its US$ 25 billion medium-term note (MTN) programme, IsDB issues the bond to meet its funding requirements.
IsDB president Dr Bandar M H Hajjar in a recent letter to Bangladesh Bank governor Fazle Kabir wrote that successful issuance of this year's Sukuk will not only raise cost-effective funding for IsDB, but will also benefit all member countries in terms of lower pricing for all IsDB-sponsored development projects in their countries.
"IsDB continues to count on unequivocal and unwavering support from institutions like the central bank of Bangladesh for investment in IsDB's Sukuk," he wrote.
He invited organisations and institutions and government funds in Bangladesh to participate in the forthcoming IsDB's Sukuk issuance, especially at primary offerings.
Mr Hajjar has assured that investing in IsDB's Sukuk, especially in light of the current global market conditions, provides the investors with access to high quality assets with the strong credit rating granted by three major international rating agencies.
"Being an AAA-rated supranational development bank, providing cost-effective development project financing to 57 member countries, IsDB's credit offers diversification, liquidity and relatively better returns when compared with the peers in the same asset class and same ratings," he noted.
The IsDB set up the dollar-dominated Sukuk programme in 2005 and raised the ceiling of the bond programme to $25 billion from $10 billion.
The last time in March this year, the IsDB issued a $1.25 billion, 5-year fixed rate Sukuk. The Sukuk was priced at par at 3.10 per cent, to be payable on semi-annual basis.
The Jeddah-based bank provides loans for various infrastructure projects in Bangladesh. The IsDB opened a Group Regional Hub in Dhaka last week which will facilitate its numerous projects in Bangladesh including agriculture, education, energy, industry and mining, transport, water, sanitation, urban services and enhance the capacity of the country's public and private institutions.
Bangladesh imports a major portion of petroleum products with IsDB's loan provided by its trade finance arm-- International Islamic Trade Finance Corporation (ITFC).
According to an IsDB release, Bangladesh is the largest beneficiary of financing with the bank's total financing for the country to date over $21.7 billion.