The International Islamic Liquidity Management Corporation (IILM) has completed the reissuance of US$1.18 billion in short-term sukuk along with a new issuance of US$105 million, covering five different tenors. The issuance reflects continued investor demand for short-term Islamic financial instruments despite growing geopolitical uncertainty and volatility in global markets.
The sukuk were competitively priced across several maturities. A two-week tenor saw US$130 million issued at 3.8%, while US$310 million for the one-month tenor was priced at 3.85%. The three-month tranche, totaling US$560 million, carried a 3.91% rate, while US$250 million for the six-month tenor was issued at 3.85%. In addition, a 12-month tranche of US$40 million was priced at 3.50%.
The auction attracted strong participation from IILM’s network of primary dealers and a broad group of institutional investors across multiple jurisdictions. Total bids reached US$3.09 billion, resulting in an average bid-to-cover ratio of 2.39 times. According to the IILM, this strong demand demonstrates sustained investor confidence in its high-quality, short-dated Islamic liquidity instruments.
Commenting on the market environment, IILM Chief Executive Officer Mohamad Safri Shahul Hamid said recent developments in the Middle East have significantly increased geopolitical risks and added uncertainty to global financial markets. He noted that the situation has led to higher volatility in funding markets, currency movements, and energy prices, with investors becoming more cautious and reassessing their portfolios.
Despite these challenges, the IILM said it has successfully executed its latest issuance in what it described as a relatively subdued global sukuk and bond market. The organization added that its instruments are designed to help Islamic banks maintain strong liquidity buffers under Basel III requirements, particularly in meeting liquidity coverage ratio (LCR) standards while maintaining high credit quality and active tradability in secondary markets.
The latest transaction marks the fifth sukuk issuance by the IILM in 2026, bringing total issuances this year to US$5.77 billion across 22 transactions of varying maturities. All issuances were conducted under the IILM’s US$8.5 billion short-term sukuk issuance programme, which is rated “A-1” by S&P Global Ratings and “F1” by Fitch Ratings.
The sukuk were distributed through a global network of 16 primary dealers, including Abu Dhabi Islamic Bank, Al Baraka Turk, Affin Islamic Bank, Al Rayan Bank, Boubyan Bank, CIMB Islamic Bank Berhad, Dukhan Bank, First Abu Dhabi Bank, Golden Global Investment Bank, Jaiz Bank, Kuwait Finance House, Kuwait International Bank, Maybank Islamic Berhad, Meethaq Islamic Banking, Qatar Islamic Bank, and Standard Chartered Bank.