Islamic Liquidity Corporation Raises $940 Million Through Sukuk Reissuance

The International Islamic Liquidity Management Corporation (IILM) successfully reissued a total of $940 million in short-term sukuk across three separate maturities. This marks the seventh auction conducted by the IILM in 2024, signifying continued investor demand for these Shariah-compliant financial instruments.

The sukuk offering comprised three tranches with varying tenors. The first tranche consisted of $440 million with a one-month maturity, priced at a competitive rate of 5. 30%. The second tranche offered $300 million in sukuk maturing in three months, carrying a slightly higher profit rate of 5. 40%. Investors seeking a longer-term option participated in the six-month tranche of $200 million, priced at 5. 55%.

This latest issuance strengthens the IILM’s position as a prominent facilitator of liquidity within the Islamic finance sector. The total amount of sukuk issued by the IILM year-to-date has reached $6. 63 billion, spread across 21 sukuk series. This figure reflects the growing appetite for Islamic financial instruments that cater to the ethical investing principles followed by many institutions and individuals.

The robust investor participation in the IILM’s sukuk auctions is further emphasized by the combined order book exceeding $2. 01 billion. This translates to a remarkable average bid-to-cover ratio of 214%, signifying that investor demand significantly surpassed the sukuk offered. This strong response underscores the confidence that market players have in the IILM’s creditworthiness, as evidenced by its top-tier ratings of “A-1” from S&P and “F1” from Fitch Ratings.

The IILM’s short-term sukuk program, valued at $4 billion, plays a crucial role in enhancing liquidity within the Islamic finance ecosystem. By offering these instruments, the IILM empowers Islamic banks and financial institutions to effectively manage their short-term funding requirements in accordance with Islamic principles.

The sukuk issued by the IILM are distributed through a well-established network of 11 primary dealers spread across the globe. This network includes prominent Islamic banks such as Abu Dhabi Islamic Bank, Al Baraka Turk, and Maybank Islamic Berhad. The involvement of these institutions ensures efficient distribution of the sukuk and facilitates broader investor participation.

The IILM’s latest sukuk reissuance is a positive development for the Islamic finance industry. It demonstrates the continued growth and dynamism of this sector, fueled by investor demand for Shariah-compliant financial instruments. The strong performance of the IILM’s auctions highlights the increasing acceptance and integration of Islamic finance within the global financial landscape.