IILM issues US$1.15 bil short-term sukuk

IILM issues US$1.15 bil short-term sukuk
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KUALA LUMPUR (Jan 19): The International Islamic Liquidity Management Corporation (IILM) has successfully conducted an auction for a total issuance of US$1.15 billion (RM4.646 billion) short-term A-1 rated sukuk in three series of one-month, three-month and six-month tenor respectively.

In a statement today, IILM said the market has priced the three series — US$400 million of a one-month tenor at 0.28%; US$500 million of a three-month tenor at 0.4% and US$250 million of a six-month tenor also at 0.4%.

It said the issuance marks the first transaction for 2021 and forms part of the IILM’s A-1 rated US$4 billion short-term issuance programme.  

The auction garnered favourable demand from both primary dealers and investors with a combined order book in excess of US$2.079 billion, representing an average oversubscription ratio of 1.8 times. 

"We are very pleased to open the year with the successful auction of US$1.15 billion short-term sukūk.  The transaction’s coverage ratio and its competitive yield continue to reflect confidence and positive sentiment from primary dealers and investors, despite the ongoing uncertainty associated with the global Covid-19 pandemic.  

"The IILM remains focused on staying vigilant and resilient during this period to ensure seamless delivery of our mandate as a frequent issuer of shariah-compliant liquidity instruments,” said chief executive officer Dr Umar Oseni. 

In terms of investor diversification, he said, the inaugural transaction for 2021 enjoyed strong sponsorship from both Gulf Cooperation Council and Asia-based Islamic primary dealers. 

“Based on our indicative issuance calendar, the IILM envisages issuing in excess of US$1 billion short-term sukūk for nearly every month in 2021,” added Umar.

The IILM’s short-term sukūk programme is rated A-1 by S&P with current outstanding issuance size amounting to US$3.51 billion.

The IILM, which is hosted by Malaysia and headquartered in Kuala Lumpur, is a regular issuer of short-term sukūk across varying tenors and amounts to cater to the liquidity needs of institutions offering Islamic financial services.