KUALA LUMPUR, Nov 3 (Bernama) -- The issuance of Malaysia's US$1.5 billion Global Sukuk at the end of July 2026 received subscription demand exceeding US$9.5 billion, reflecting the continued confidence of international investors in the country's economic prospects and credit position.
The Ministry of Finance (MoF) said the issuance of the two tranches of sukuk recorded an oversubscription of 4.7 times, allowing the government to obtain the lowest spread in the history of Malaysia's Global Sukuk issuance.
"The strong demand allowed the government to reduce the spread by 30 basis points (bps) from the initial price guidance for both tranches.
"This resulted in the 5.75-year maturity tranche being priced at 15 bps above the 5-year US Treasury rate of 4.612 per cent per annum, while the 10-year tranche was priced at 25 bps above the 10-year US Treasury rate of 4.949 per cent per annum," it said in a written response published on the Parliament website today.
The ministry noted that the spreads were almost equivalent to the issuance pricing of countries rated A1 and AA2, even though Malaysia has a sovereign credit rating of A3.
"This reflects confidence in Malaysia's credit prospects driven by strong macroeconomic fundamentals and a commitment to fiscal discipline and ongoing structural reforms," MoF explained.
In addition, the government ensures that debt issuance is carried out within the established limits and legal framework.
Following the issuance of the 2026 Global Sukuk, the government's offshore debt stood at RM23 billion, which accounted for only about 1.7 per cent of the total Federal Government debt and remained well below the statutory limit of RM35 billion under the Foreign Loans Act 1963.
This relatively small offshore debt exposure also helps limit currency fluctuations and international market uncertainties, the ministry added.
-- BERNAMA