Islamic Corporation for the Development of the Private Sector (ICD) is launching a potential five-year Tenge sukuk to expand its operational assets in Kazakhstan and support local lending; this could be the first-ever tenge sukuk by a Development Financial Institution and will be an amortized Sukuk with all payments made in Tenge; the move supports ICD’s Line of Finance activities in Kazakhstan and highlights the growing trend of local currency borrowing in ICD member countries.
The Islamic Corporation for the Development of the Private Sector (ICD) is proud to announce that it has enlisted the services of Tengri Partners Investment Banking to organize investor meetings in advance of a five-year Tenge-denominated sukuk. This move is expected to pave the way for the very first tenge sukuk by a Development Financial Institution.
The senior unsecured sukuk is currently subject to market conditions, with fixed-income investor meetings already underway in Almaty and set to continue this week. ICD, rated ‘A+’ by Fitch Ratings, is eager to expand its operational assets in Kazakhstan and will use the proceeds to finance its local lending in the country.
All payments, including settlement, coupon, and principal, will be made in Tenge. The potential issuance will be an amortized Sukuk that matches the cashflow of the financing assets, starting from the end of 12 months from the issuance date and semi-annually thereafter on an equal amount basis.
ICD has chosen the Republic of Kazakhstan for its first borrowing from the local markets, marking a significant milestone for the organization. With well-established ties to Kazakhstan, which is the leading player in Islamic finance in the Central Asian region, ICD has played a key role in the conversion of Zaman Bank into a fully Shariah-compliant operation, making it one of the few Islamic banks in the country. In recent years, Kazakhstan has taken legal and regulatory steps to introduce Islamic banking and finance, positioning itself as a hub for Islamic finance in Central Asia.
This move is expected to support ICD’s Line of Finance activities in Kazakhstan, facilitating the implementation of an approved local currency global line of finance to support eligible financial institutions and SMEs in Kazakhstan.
With hard currency rates on the rise and making the private sector reluctant to borrow, there is a strong demand for local currency borrowing in IsDB member countries. Other multilateral financers have utilized local currency borrowing for their on-lending activities, and local currency emerging market bonds have been a growing trend for the past few years in the Commonwealth of Independent States (CIS).
ICD is proud to be at the forefront of this trend, making it easier for eligible financial institutions and SMEs to access financing in local currencies. The potential sukuk issuance is a crucial step forward for ICD, demonstrating the organization’s commitment to the development of the private sector across member countries.
The Islamic Corporation for the Development of the Private Sector (ICD) is a multilateral development financial institution and a member of the Islamic Development Bank (IsDB) Group. ICD was established in November 1999 to support the economic development of its member countries through the provision of finance for private sector projects, promoting competition and entrepreneurship, providing advisory services to governments and private companies of its member countries, and encouraging cross-border investments.
ICD is Rated A2’ by Moody’s, ‘A-’ by S&P and, A+ by Fitch. ICD establishes and strengthens cooperation and partnership relationships with an aim to establish joint or collective financing.