Islamic finance body IILM re-issues $860 mln sukuk

Malaysia-based International Islamic Liquidity Management Corp (IILM) has reissued $860 million worth of three-month Islamic bonds, or sukuk, the organisation said on Monday.

The auction drew 11 bids worth $1.065 billion, with the sukuk priced at a profit rate of 0.553 percent, according to a filing on the website of Malaysia's central bank.

The IILM last went to the market in November when it increased its outstanding sukuk programme, rated A-1 by Standard and Poor's, to $1.85 billion from $1.65 billion.

IILM sukuk are designed to meet a shortage of highly liquid, investment-grade financial instruments which Islamic banks can trade to manage their short-term funding needs.

Shareholders of the IILM are the central banks of Indonesia, Kuwait, Luxembourg, Malaysia, Mauritius, Nigeria, Qatar, Turkey and the United Arab Emirates, as well as the Jeddah-based Islamic Development Bank.

(Reuters / 19 January 2014)

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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Islamic finance body IILM boosts sukuk programme with US$860m issue

DUBAI, Jan 20 — The Malaysia-based International Islamic Liquidity Management Corp expanded its sukuk issuance programme today by auctioning US$860 million  (RM2.85 billion) of three-month Islamic bonds at a yield of 0.55635 per cent.

The issue brings the total amount of the IILM’s outstanding sukuk to US$1.35 billion, the body said in a statement. Its programme, launched last year, envisages issuance increasing eventually to as much as US$2 billion.

The IILM, owned by a consortium of central banks from Asia, the Middle East and Africa, is seeking to help Islamic banks manage their short-term funding needs by easing their shortage of liquid, investment-grade financial instruments.

Today’s issue was sold to nine primary dealers from Asia, the Middle East and Europe.

The IILM’s ultimate aim is to encourage the development of an active, cross-border secondary market in sukuk, but a lack of liquidity has so far prevented that.

Since the programme’s launch, primary dealers have held on to the IILM instruments after auctions and there has been little if any secondary market trade in them, an official at one of the primary dealers told Reuters.

(The Malay Mail Online.Com / 20 Jan 2014)

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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com