| 07 November, 2019

IILM reissues $600mln sukuk; GCC banks act as primary dealers

The allocation of GCC-based primary dealers stood at 39% and 67% for the 1-month and 3-month Sukuk respectively

Image used for illustrative purpose.
Young Arab investor monitoring his investments.

Image used for illustrative purpose. Young Arab investor monitoring his investments.

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Malaysia-based International Islamic Liquidity Management Corporation (IILM) has reissued A-1 short term sukuk worth $600 million in two series with 1-month and 3-month tenors.

The reissuance came in the form of $300 million with 1-month tenor at a profit rate of 1.85 percent and $300 million with 3-month tenor at a profit rate of 1.91 percent.

Several lenders from the Gulf countries that acted as primary dealers include Abu Dhabi Islamic Bank, First Abu Dhabi Bank, Barwa Bank, Boubyan Bank, Kuwait Finance House and Qatar Islamic Bank.

The non-GCC banks that participated in the reissuance include Maybank Islamic, Standard Chartered Bank, Al Baraka Turk and CIMB Bank.

The demand for the 1-month and 3-month Sukuk series reached a bid-to-cover ratio of 208 percent, and 255 percent, respectively.

The allocation of GCC-based primary dealers stood at 39 percent and 67 percent for the 1-month and 3-month sukuk, respectively. Asia-based primary dealers were respectively allocated 33 percent and 33 percent of the 1-month and 3-month sukuk.

Fitch ratings had announced in October that international sukuk issuance from major Islamic finance markets was mainly unchanged in the first nine months of 2019 compared to the same period last year.

Fitch added that Saudi Arabia raised 8.834 billion Saudi riyals ($2.36 billion) in September through a local currency-denominated sukuk.

According to Moody’s Investors service, Sukuk issuance is set to rise 6 percent to around $130 billion this year, a fourth consecutive annual increase.

(Reporting by Gerard Aoun, editing by Mily Chakrabarty)

(gerard.aoun@refinitiv.com)

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© ZAWYA 2019

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