How Islamic debt issuers can lower their cost of funding: brief case study

One of the pillars within Islamic/conventional debt capital markets is determining the right pricing for your cost of funding. This vital issue is a deal-breaker for potential issuers. Slowly and increasingly some of the biggest Emerging Market issuers are starting to equip themselves with former “debt capital market” bankers in order to master the art of pricing and create value for stakeholders. One of the most brightest example of such strategy is Saudi Arabia’s National Debt Management Center (NDMC). On 22nd of January 2020, the formerly known as Debt Management Office (DMO) priced USD 5bn multi-tranche bond. The story is not on the oversubscribed transaction (an order book of more than USD 23bn) but rather on how implementing the most aggressive pricing strategy,...