PETALING JAYA; Strong investor demand drove a 4.7 times oversubscription for Malaysia’s US$1.5 billion (RM6.1 billion) global sukuk issuance, which was priced at a record-low spread, the Ministry of Finance (MoF) said.
The issuance comprised a US$850 million 5.75-year tranche and a US$650 million 10-year tranche.
MoF said strong investor demand enabled the government to tighten pricing by 30 basis points (bps) from the initial price guidance (IPG), to Treasury plus (T+) 15 bps for the 5.75-year tranche and T+25 bps for the 10-year tranche.
“The issuance establishes a new pricing benchmark for future global issuances by government-linked entities and the private sector, while reflecting continued confidence among global investors in Malaysia’s fiscal and economic reform agenda,“ the ministry said in a statement today.
The asset-backed sukuk is structured under the Manafae Concept, in accordance with the Accounting and Auditing Organisation for Islamic Financial Institutions guidelines, and is backed by service rights in Malaysia’s urban public rail network.
Finance Minister II Datuk Seri Amir Hamzah Azizan said Malaysia’s economy is being guided by the Madani Economy framework, which has put the country on the right track.
“We have strengthened public finances, ensured sustainable economic growth and laid a strong foundation for Malaysia’s long-term resilience.
“The strong oversubscription and record-low spread reflect continued international investor confidence in Malaysia’s economic prospects and development policies. This demonstrates that the reform agenda, prudent debt management strategy and commitment to sustainable growth continue to attract high-quality investors despite a challenging global environment,” he said.
MoF said the strong response reflected progress achieved over the past three years since the launch of the Madani Economy framework on July 27, 2023.
It said the fiscal deficit had narrowed to 3.7% of gross domestic product (GDP) in 2025 from 6.4% in 2021, while government borrowings declined to nine per cent of GDP from 13.6% over the same period.
“Malaysia’s strong fiscal position has been supported by economic growth of 5.2% in both 2024 and 2025, followed by 5.4% growth in the first quarter of 2026, while the advance estimate of 5.8% for the second quarter points to stronger growth than initially projected,” MoF said.
It said both tranches were assigned an A3 rating by Moody’s Investors Service and an A- rating by S&P Global Ratings, in line with Malaysia’s sovereign credit ratings and stable outlook.
The 5.75-year tranche was priced at a profit rate of 4.612% per annum with a spread of 15 bps over the comparable US Treasury, while the 10-year tranche was priced at a profit rate of 4.949% per annum with a spread of 25 bps.
Proceeds from the issuance will be used for the government’s Shariah-compliant general purposes, including financing development expenditure and/or refinancing existing obligations.
MoF said its investor engagement programme attracted participation from 140 international investors across various segments, including sovereign wealth funds, central banks and governments, asset managers, financial institutions, insurance companies and pension funds.
“By geography, the 5.75-year tranche was allocated to investors in Asia (76%), Europe, the Middle East and Africa (EMEA) (19%) and the US (5%). The 10-year tranche was allocated to investors in Asia (63%), EMEA (18%) and the US (19%).
“By investor type, the 5.75-year tranche was allocated to banks and financial institutions (43%), fund and asset managers (27%), central banks and corporate and commercial banks (15%), sovereign wealth funds and public sector institutions (8%), and insurance companies and pension funds (7%),“ it said.
The 10-year tranche was allocated to fund and asset managers (59%), financial institutions and banks (30%), corporate and commercial banks (7%), and central banks (4%).
The issuance was conducted in compliance with Regulation S and Rule 144A of the US Securities Act of 1933. It will be listed on the Hong Kong Stock Exchange, Labuan International Financial Exchange and Bursa Malaysia under the Exempt Regime.
CIMB, HSBC, JPMorgan and Standard Chartered Bank acted as joint lead managers and joint bookrunners for the issuance.
The sukuk’s syariah structure was approved by the Shariah Committee Board of CIMB Islamic Bank Bhd, the HSBC Global Shariah Supervisory Committee, the Standard Chartered Global Shariah Supervisory Committee and the JPMorgan Shariah Committee.
