Complex Made Simple

Islamic finance body IILM auctions first four-month sukuk

The IILM, a consortium of central banks from Asia, the Middle East and Africa, began issuing sukuk in 2013

Malaysia-based International Islamic Liquidity Management Corp (IILM) has lengthened maturities in its Islamic bond programme by auctioning $500 million of four-month sukuk, its first sale of that tenor.

Previously, the IILM has issued three-month and six-month paper, which were introduced to meet a shortage of liquid, investment-grade instruments Islamic banks could trade to manage short-term funding needs.

The IILM sold the four-month sukuk at a profit rate of 1.37389 percent, attracting 17 bids worth a combined $1.3 billion, the Malaysian central bank’s website showed.

It also sold $840 million of three-month sukuk at a profit rate of 1.24411 percent, attracting orders of $1.6 billion via 14 bids. The issues were bought by 11 primary dealer banks.

The IILM, a consortium of central banks from Asia, the Middle East and Africa, began issuing sukuk in 2013 under an issuance programme which permits maturities of up to one year.