DOHA: The Governing Board of the Kuala Lumpur-based International Islamic Liquidity Management Corporation (IILM) announced its inaugural short-term sukuk programme aimed at addressing liquidity challenges faced by Institutions that offer Islamic Financial Services (IIFS). The announcement was made at its 10th meeting held here yesterday.
The launch of the programme is pursuant to the granting of an A-1 public rating by Standard & Poor’s Rating Services. The completion of this phase of the programme paves the way for the issuance of the IILM inaugural sukuk which is expected to take place in the second quarter 2013.
H E Sheikh Abdulla bin Saoud Al Thani, Chairman of the Governing Board, and Governor of Qatar Central Bank, said: “The launch of the highly rated IILM sukuk programme is a milestone for the IILM. It will be the first step towards creating a cross-border liquidity instrument for IIFS.
“The IILM sukuk will help to address the challenges that IIFS have been facing globally with regard to their need for highly rated financial instruments to manage their liquidity compared to their conventional counterparts.”
The short-term financial instrument to be issued under the programme will complement the currently available long-term and medium-term sukuk in the market.
The initiative is being seen as a key move by the IILM aimed at creating a robust global cross-border market for Islamic financial instruments and strengthening the liquidity management of institutions that offer IIFS.
The sukuk programme with an A-1 short-term rating will be a significant milestone as it will be the first Shariah-compliant US dollar denominated financial instrument in the market to be issued at maturities of up to one year.
This will also be the first money-market instrument backed by sovereign assets in the form of Sukuk with multi-jurisdictional primary-dealer network which will facilitate distribution to investors worldwide.
This initiative represents a unique collaboration between multiple regulatory authorities and multilateral development banks to enhance the financial stability and the efficient functioning of the Islamic financial markets.
The IILM is an international institution established on October 25, 2010 by Central Banks, monetary authorities and multilateral organisations to develop and issue short-term Shari’ah-compliant financial instruments to facilitate effective cross-border liquidity management for IIFS.
The current members of the IILM Governing Board are the central banks and monetary agencies of Indonesia, Qatar, Kuwait, Luxembourg, Malaysia, Mauritius, Nigeria, Turkey, the UAE and the Islamic Development Bank Group.
The Peninsula
