KUALA LUMPUR (March 17): The International Islamic Liquidity Management Corporation (IILM) said it drew bids reaching US$2.25 billion (RM8.8 billion) for its latest offering of short-term sukuk, as the escalating Iran war in the Middle East fuels a global "flight to quality" among investors.
In a statement Tuesday, IILM said it successfully completed the reissuance of its US$925 million short-term sukuk across five tenors — ranging from two weeks to 12 months — and the auction attracted strong participation from its primary dealers and institutional investors across multiple jurisdictions.
The total bids recorded translates into a robust average bid-to-cover ratio of 2.43 times, underscoring sustained confidence in the IILM’s high-quality, short-dated Islamic instruments despite challenging global market conditions, the organisation said.
IILM chief executive officer Mohamad Safri Shahul Hamid said the strong demand for the short-term sukuk "reflects a clear flight to quality”, with investors "increasingly seeking high quality, short duration instruments that offer both resilience and liquidity".
“With inflation risks re-emerging and expectations for near-term rate cuts being repriced, the market environment remains challenging. IILM’s consistent access and strong demand signal the continued relevance of its instruments as a core liquidity management tool in times of stress,” Safri added.
The five tranches were priced between 3.78% and 3.88%, with the largest issuance being US$350 million for the three-month tenor.
The five tranches were priced at 3.80% for US$220 million (two-week), 3.85% for US$255 million (one-month), 3.88% for US$350 million (three-month), 3.83% for US$70 million (six-month), and 3.78% for US$30 million (12-month).
The latest issuance marks IILM’s sixth sukuk auction year to date, bringing its total issuances in 2026 to US$6.7 billion across 27 sukuk series.
The sukuk were issued under 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 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.
Its sukuk is distributed by 16 primary dealers globally: Abu Dhabi Islamic Bank, Al Baraka Turk, Affin Islamic Bank, AlRayan 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 from Bank Muscat, Qatar Islamic Bank and Standard Chartered Bank.