the IILM has achieved year-to-date cumulative issuances totalling USD 14.12 billion across 36 US dollar-denominated short-term Ṣukūk series, which is the highest to date since our inaugural issuance in 2013 and a significant milestone in the organisation’s history
The International Islamic Liquidity Management Corporation (IILM) is pleased to announce that it has successfully completed the auction for the reissuance of an aggregate USD 1.1 billion short-term “A-1” rated Ṣukūk across three different tenors of one, three, and six-month respectively.
The three series were priced competitively at:
i) 0.17% for USD 450 million for 1-month tenor;
ii) 0.26% for USD 450 million for 3-month tenor; and
iii) 0.36% for USD 200 million for 6-month tenor.
In its final auction for 2021, the IILM’s Ṣukūk reissuance today witnessed a competitive tender among Islamic Primary Dealers and investors across the GCC markets as well as Asia, with a strong orderbook in excess of USD 1.94 billion, representing an average oversubscription rate of 1.76 times.
Dr. Umar Oseni, Chief Executive Officer of the IILM, said: “As the year draws to a close and with today’s successful issuance, the IILM has achieved year-to-date cumulative issuances totalling USD 14.12 billion across 36 US dollar-denominated short-term Ṣukūk series, which is the highest to date since our inaugural issuance in 2013 and a significant milestone in the organisation’s history. Furthermore, the IILM’s Ṣukūk issuances during the year up to November accounts for 26% of total global US dollar Ṣukūk issuances. 2021 also marks for the first time since inception a full year that the IILM offers 1-month, 3-month, and 6-month tenors on a consistent monthly basis.
2021 was indeed an outstanding year for the IILM despite the global market uncertainties. The IILM was ranked as the top US dollar-denominated Ṣukūk issuer in the first half of 2021 by global data provider Refinitiv, with the highest monthly issuance size reaching USD 1.4 billion in March. The lowest profit rates for the three main tenors of IILM Ṣukūk recorded were 0.17% for 1-month, 0.25% for 3-month and 0.35% for 6-month, reflecting the competitiveness of the IILM Ṣukūk in the market. The October auction also witnessed the highest order book of over USD 800 million for the 1-month issuance, reflecting the high interest on the shorter tenor from investors.”
“Liquidity management has never been as important as it is now, especially considering the Covid-19 pandemic and its mutating variants that have threatened market stability and global recovery. In ensuring that financial institutions offering Islamic financial services are able to manage their liquidity effectively and efficiently, the IILM will continue to provide highly rated liquidity instruments backed by sovereign and sovereign-linked assets,” he added.
The IILM has issued a total of USD 75.54 billion across 161 short-term Ṣukūk issuances over the last eight years, reflecting the organisation’s ability to provide high quality Shari’ah compliant instruments and reliable offerings to Primary Dealers and investors, as well as offering stability to the global Islamic liquidity market.
On a year-on-year comparison, the IILM achieved a higher average monthly issuance size in 2021 with an 18% increase in the offering size to address the growing demand for short-term Ṣukūk from investors. Despite the challenging market conditions, the IILM credit spread remained stable and at a low level of 17.1bps in average above LIBOR in 2021, while maintaining a high average of bid-to-cover ratio of 162% since the beginning of the year. This reflects the market’s recognition of the IILM Ṣukūk as a high credit quality liquidity instrument.
The secondary market trading recorded a surge in volume traded compared to last year, on the back of excessive internal credit line of the investors. The total volume traded on the IILM Ṣukūk reached USD 1.4 billion through 135 trades between Primary Dealers and end-investors throughout the year.
Looking ahead into the new year, the IILM will focus on developing its programme with new features and potentially addressing the demand for other tenors depending on market conditions. The IILM looks forward to attracting new investors to diversify its investor base and thus enhancing the liquidity for the IILM Ṣukūk on the secondary market. The Issuance Calendar for 2022 will be released before the end of the year.
The IILM is a regular issuer of short-term Ṣukūk across varying tenors and amounts to cater to the liquidity needs of institutions offering Islamic financial services. The total amount of IILM Ṣukūk outstanding is now USD 3.51 billion. The IILM short-term Ṣukūk programme is rated “A-1” by S&P.
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About the IILM
The International Islamic Liquidity Management Corporation (IILM) is an international organisation established on 25 October 2010 by central banks, monetary authorities and multilateral organisations to develop and issue short-term Shari’ah-compliant financial instruments to facilitate effective cross-border liquidity management for institutions that offer Islamic financial services (IIFS).
The current members of the IILM Governing Board are the central banks and monetary agencies of Indonesia, Kuwait, Luxembourg, Malaysia, Mauritius, Nigeria, Qatar, Turkey, the United Arab Emirates, as well as the multilateral Islamic Corporation for the Development of the Private Sector.
Membership of the IILM is open to central banks, monetary authorities, financial regulatory authorities or government ministries or agencies that have regulatory oversight of finance or trade and commerce, and multilateral organisations.
The IILM is hosted by Malaysia and headquartered in Kuala Lumpur.
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Download the Arabic version of the press release here.
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