Dubai—Dentons has advised the Islamic Development Bank (IsDB) on its first sustainable sukuk issuance of US$1.5 billion, issued under IsDB's US$25 billion Trust Certificate Issuance Programme. IsDB is the first AAA-rated institution in the world to have issued a sustainable sukuk. The proceeds from the debut sustainable issuance will be used exclusively to finance social projects to assist the IsDB's member countries with managing the impact of the COVID-19 pandemic. As such, the transaction also represents the first issuance in the format of a sukuk aimed at raising proceeds to tackle the effects of the pandemic. 

The IsDB put together a sustainable finance framework, with Sustainalytics providing the ESG rating and CICERO Shades of Green providing a second party opinion. The IsDB had previously issued a EUR1 billion green sukuk under its sustainable finance framework in December 2019. 

Dentons has regularly advised IsDB on the issuance of debt securities in the international capital markets under IsDB's sukuk programme. The transaction was successfully completed on 25 June 2020 and marked IsDB’s second public issuance in 2020.  

The issuance was listed on Euronext Dublin, NASDAQ Dubai and Bursa Malaysia, and was offered to sophisticated investors outside of the United States in reliance on Regulation S under the US Securities Act 1933. Citi, Crédit Agricole CIB, Emirates NBD Capital, Gulf International Bank, HSBC, The Islamic Corporation for the Development of the Private Sector, NATIXIS, Société Générale and Standard Chartered Bank acted as joint lead managers on the issuance, while Kuwait International Bank acted as co-manager. 

Dentons Debt Capital Markets partner Alex Roussos, based in Dentons' Dubai office, commented, "We are very proud and honoured to have worked with the IsDB team on yet another ground-breaking deal. This is IsDB's second sukuk under its Sustainable Finance Framework, in quick succession to the green sukuk that was completed in December. It is evidence of the growing importance of sustainable finance in our communities and the very positive trend issuers such as IsDB are setting. Issuers and investors are pulling together in this direction. It's a change we have been waiting for a long time and it is very pleasing to see come to fruition now. We expect to see more issuers, from a variety of industries, establish sustainable finance programmes in the future as the corporate governance and pricing benefits appear to far outweigh the legal and other advisory costs in putting these structures together". 

Dentons Middle East managing partner Paul Jarvis, based in Dentons' Abu Dhabi office, commented, "This is another great achievement for our team and a privilege to advise IsDB in further developing their ESG portfolio". 

The Dentons team was led by partner Alex Roussos, with assistance from senior legal consultant Katie Phillips and associate Sana Siddiqui.

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