IILM treads fine line in designing maiden sukuk

The Malaysia-based International Islamic Liquidity Management Corp (IILM), backed by nine central banks and monetary agencies as well as the Jeddah-based Islamic Development Bank, has said it plans to issue up to $500mn of dollar-denominated sukuk in the second quarter of this year, and eventually expand the programme to as much as $3bn. However, the company faces a delicate task as it designs its maiden sukuk: it must make the issue attractive enough for investors to buy, but not so attractive that most of them buy to hold. The IILM’s mission is to create a highly liquid tool which Islamic banks will trade to manage their short-term funds. Whether it gets the balance right will affect the development of Islamic money market trading in the Gulf and Southeast Asia over the coming year.