The outstanding short-term sukuk portfolio of the Kuala Lumpur-headquartered International Islamic Liquidity Management Corporation ( IILM ) has reached a record-high of US$5.7 billion, following the successful addition of a US$500 million highly rated sukuk asset by a sovereign-owned entity in the Gulf Cooperation Council  ( GCC ) region.

The IILM, an international organization that develops and issues short-term Shariah-compliant financial instruments, notes that the increase in underlying assets enhances the organization’s capacity to issue short-term sukuk to meet the growing demand from a broad base of global investors.

With the inclusion of the new asset, the organization successfully concluded the reissuance and issuance of an aggregate US$1.28 billion across three competitively priced tenors:

• 4.55% for US$540 million for the one-month tenor
• 4.55% for US$400 million for the three-month
• 4.55% for US$340 million for the six-month.

The auction attracted strong demand from the IILM’s network of primary dealers and global investors, resulting in a healthy orderbook of US$2.58 billion and a robust average bid-to-cover ratio of 202%, that reflects continued confidence in its short-term sukuk programme.

The issuance forms part of the organization’s A-1 ( S&P ) and F1 ( Fitch Ratings ) rated US$6 billion short-term sukuk issuance programme. 

The IILM’s short-term sukuk is distributed by a diversified and growing network of primary dealers globally, namely Abu Dhabi Islamic Bank, Al Baraka Turk, Affin Islamic Bank, Boubyan Bank, CIMB Islamic Bank Berhad, Dukhan Bank, First Abu Dhabi Bank, Golden Global Investment Bank, Kuwait Finance House, Kuwait International Bank, Maybank Islamic Berhad, Meethaq Islamic Banking from Bank Muscat, Qatar Islamic Bank and Standard Chartered Bank.

The IILM is a regular issuer of short-term sukuk across varying tenors and amounts to cater to the liquidity needs of institutions offering Islamic financial services. The organization, it adds, will continue to reissue its short-term liquidity instruments monthly as scheduled in its issuance calendar.

This latest issuance marks the organization’s ninth auction year-to-date and the second for the month of May. Year-to-date, cumulative issuances have reached US$9.49 billion across 27 sukuk series of varying tenors.

“[The latest] auction marks another milestone in the IILM’s growth trajectory with the inclusion of a new highly rated US$500 million sukuk asset,” says Mohamad Safri Shahul Hamid, the organization’s CEO. “This addition not only bolsters our issuance capacity but also enhances the diversification of our asset pool across the GCC region. It represents a huge step in expanding our geographical footprint as well as strengthening the credit quality and resilience of the IILM sukuk programme.”