Malaysia-based International Islamic Liquidity Management (IILM) has issued Islamic bonds (Sukuk) worth US$490 million on behalf of a consortium of central banks from Asia, the Middle East and Africa.
The three-month Islamic bonds were denominated in US dollars and were fully subscribed, according to a Reuters report.
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The Sukuk were priced at 30 basis points over the London Interbank Offered Rate.
The US$490 million, three-month Islamic bond was auctioned to seven institutions from around the world: Kuwait Finance House, Europe’s KBL Private Bankers, Malayan Banking Bhd (Maybank), National Bank of Abu Dhabi, Qatar National Bank , Standard Chartered Bank and AlBaraka Turk , which is the Turkish unit of Bahrain’s AlBaraka Banking Group.
These primary dealers will now be responsible for selling the Sukuk on to other Islamic banks and institutions in an effort to create an active market in the instruments, the publication added.
The IILM, founded by the central banks in 2010, aims to address that weakness by issuing Sukuk which banks can trade across borders.
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By GlobalData"The short-term Sukuk will complement the intermediate and long-term Sukuk currently available in the market," Reuters quoted the IILM as saying.
