The International Islamic Liquidity Management Corporation (IILM) has successfully completed its final sukuk issuance of the year amounting to US$690 million, capping off a period of remarkable success and growth in 2024.

This is the 14th auction of the year following a series of significant milestones, including a 17.9% increase in the outstanding size to US$4.14 billion, compared with US$3.51 billion in 2023. It also demonstrated a steady and continued expansion of the investor base across diverse jurisdictions and new markets.

The reissuance, announced on December 4, comprised of short-term sukuk across three different tenors, namely:

• US$360 million with one-month tenor paying 4.58%
• US$200 million with three-month tenor paying 4.65%
• US$130 million with six-month tenor paying 4.52%.

Despite challenging global market conditions and persistent uncertainty, the demand for the IILM’s sukuk remains strong, highlighting investor confidence and the resilience of Islamic finance.

The substantial growth in both the volume and geographic spread of investor participation, the IILM says, underscores its strengthened position in the global Islamic capital market and its continued ability to attract both existing and new investors, reflected in the healthy order book in excess of US$1.48 billion, or a bid-to-cover ratio of 215%.

IILM CEO Mohamad Safri Shahul Hamid says this year’s sukuk offerings in excess of a cumulated amount of US$13 billion have demonstrated its ability to adapt to new market dynamics, manoeuvre shifting market rates expectations while maintaining a strong investor confidence.

“The solid demand for the IILM sukuk, particularly in new markets, reinforces our commitment to expanding access to Shariah-compliant liquidity tools opportunities worldwide,” he points out. “This auction represents the final sukūk issuance for 2024, which further solidifies the IILM’s leadership in the global sukūk market.”

The expansion of the IILM’s issuance programme size from US$4 billion to US$6 billion, Safri says, which was announced in August, has facilitated the inclusion of new sukuk assets worth approximately US$1 billion, allowing the IILM to reach US$4.14 billion in outstanding asset portfolio, post-redemption of maturing assets.

This has enabled the IILM to further diversify its asset portfolio, while expanding the volume of its monthly short-term sukuk issuances currently averaging at US$1 billion – compared with US$960 million at end-2023 – to a projected average of US$1.3 billion in 2025.

“This will,” Safri adds, “inevitably reinforce the growing importance of IILM’s short-term sukuk to the Islamic financial institutions across the globe by providing them with much-needed access to reliable and dependable sources of high-quality liquid asset instruments.”

As well, 2024, the IILM notes, saw the extension of its global footprint to a broader investor base by tapping new markets, as well as the inclusion of Affin Islamic Bank in May 2024 as the IILM’s 11th primary dealer, alongside the impending onboarding of the first primary dealer from Oman.

It saw the participation of 25 new investors across different regions for its short-term sukuk in 2024, including 13 Islamic accounts, which further reflects the growing market confidence in the IILM’s high-quality Islamic papers and underpins its status as a unique provider of Shariah-compliant liquidity management solutions.

Looking ahead into 2025, the IILM plans to ramp up its asset origination activities through bespoke and attractive offerings to address the diverse needs of global sovereign and sovereign-linked sukuk issuers, as well as rolling out alternatives to sukuk assets to allow the further growth of supply and meet the growing market demand.

The IILM will likewise continue to expand its investor base and network of primary dealers as it looks to expand regional collaborations and enter new markets to further integrate Islamic liquidity solutions into the global financial system.

Since the inaugural issuance of the short-term sukuk under its programme in 2013, the IILM has issued a cumulative of US$113.95 billion worth of short-term sukuk across 276 series. The issuance forms part of the IILM’s A-1 (S&P Global Ratings)- and F1 (Fitch Ratings)-rated US$6 billion short-term sukuk issuance programme.

The IILM’s short-term sukuk is currently distributed by a diversified network of 11 primary dealers globally, namely Abu Dhabi Islamic Bank, Al Baraka Turk, Affin Islamic Bank, Boubyan Bank, CIMB Islamic Bank, Dukhan Bank, First Abu Dhabi Bank, Kuwait Finance House, Maybank Islamic, Qatar Islamic Bank and Standard Chartered.