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First Sukuk Underscores IFC Commitment to Middle Eastern, North African Capital Markets
Dubai, November 17, 2009—IFC, a
member of the World Bank Group, today asserted that strategic investments
in Gulf Cooperation Council countries can strengthen financial markets
and promote economic development in the Middle East and North Africa.
“Our investments in the Gulf Cooperation
Council capital markets create opportunities across the region while providing
productive outlets for excess savings generated by oil-producing countries,”
said Lars Thunell, IFC Executive Vice President and CEO, at a news conference
in Dubai.
Abdulla Mohammed Al Awar, CEO of the
Dubai International Finance Centre Authority said: “IFC’s investments,
expertise and knowledge of best practices will help develop both the Sukuk
market and capital markets in the region. We look forward to continue promoting
an enabling business environment to help IFC advance its objectives.”
On November 3, IFC became the first
non-Islamic financial institution to issue a Sukuk for term funding in
the Gulf Cooperation Council. IFC plans to issue Sukuks every 12 to 18
months.
The IFC Sukuk was oversubscribed and
pricing was at 15 basis points over Mid Swaps, the tightest pricing for
a Sukuk so far. There were 15 orders and 90 percent of the demand came
from institutional investors in the Middle East.
IFC selectively invests in the Gulf
Cooperation Council to support the development of financial markets, regional
integration and private sector development in the Middle East and North
Africa. IFC also promotes south-south investment from Gulf Cooperation
Council countries to developing markets.
“Over the last three years, IFC has
invested $1.5 billion alongside Gulf investors in their intraregional investments,”
said Thunell.
The IFC Sukuk is a five-year, dollar–denominated,
non-amortizing issue with total face value of $100 million. It is backed
by a portfolio of IFC projects, structured as Islamic-compliant financial
leases, with comparable disbursed value.
“The Arab world is a priority for the
World Bank Group, and addressing unemployment in the region is critical
for long-term growth and development,” said Michael Essex, IFC Director,
Middle East and North Africa. “IFC has invested $4 billion in the region
over the last three years to support the private sector and create jobs,”
he said.
IFC is the only international financial
institution focused exclusively on the private sector, the engine of sustainable
development in emerging markets. Along with the World Bank [IBRD], it is
currently seeking a capital increase to strengthen its ability to create
opportunity for the poor in developing countries—including by strengthening
financial markets in the Middle East and North Africa.
About IFC
IFC, a member of the World Bank Group,
creates opportunity for people to escape poverty and improve their lives.
We foster sustainable economic growth in developing countries by supporting
private sector development, mobilizing private capital, and providing advisory
and risk mitigation services to businesses and governments. Our new investments
totaled $14.5 billion in fiscal 2009, helping channel capital into developing
countries during the financial crisis. For more information, visit www.ifc.org.
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