THE Malaysian government has successfully priced its US$1.5 billion Global Sukuk issuance after receiving overwhelming investor demand, with subscriptions exceeding US$9.5 billion and resulting in a 4.7 times oversubscription rate.
The issuance comprises two tranches — US$850 million with a maturity period of 5.75 years and US$650 million with a 10-year maturity period.
Strong demand enabled the government to achieve final pricing at the lowest spreads ever recorded for Malaysia’s global sukuk issuance, narrowing the initial price guidance by 30 basis points to T+15 basis points for the 5.75-year tranche and to T+25 basis points for the 10-year tranche.
The latest issuance strengthens Malaysia’s position in international financial markets by establishing a new benchmark that could serve as a pricing reference for future global issuances by government-linked entities and private sector companies.
The Ministry of Finance said the strong response reflected sustained international investor confidence in Malaysia’s fiscal reform agenda, economic outlook and long-term development strategies.
The sukuk is backed by assets comprising service rights within Malaysia’s urban public rail transport network and is structured under the Manafae concept in accordance with guidelines issued by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI).
The achievement further reinforces Malaysia’s position as a global leader in Islamic finance and one of the world’s leading sukuk markets.
Finance Minister II Datuk Seri Amir Hamzah Azizan said Malaysia’s economic policies were guided by the Ekonomi MADANI framework, which had placed the country on a stronger growth trajectory.
"Malaysia’s economic policies today are guided by the Ekonomi MADANI framework, which has placed the country on the right path. We have strengthened public finances, ensured sustainable economic growth and laid a strong foundation to build Malaysia’s long-term resilience," he said.
"The high level of oversubscription and the lowest spreads reflect continued international investor confidence in the country’s economic prospects and strong development policies.
"This demonstrates that our reform agenda, prudent debt management strategies and commitment to sustainable growth continue to attract high-quality investors despite challenging global conditions," he added.
The Ministry said the positive response came after three years of implementing the Ekonomi MADANI framework, launched on July 27, 2023, which aims to raise Malaysia’s economic potential, improve public welfare and strengthen governance and institutions.
Malaysia’s fiscal deficit narrowed from 6.4% of gross domestic product (GDP) in 2021 to 3.7% of GDP in 2025, while government borrowing declined to 9% of GDP from 13.6% during the same period.
The improvement reflected the government’s continued commitment to fiscal discipline under the Public Finance and Fiscal Responsibility Act 2023 (Act 850).
The stronger fiscal position was achieved alongside sustained economic expansion, with Malaysia recording growth of 5.2% in both 2024 and 2025.
The country’s resilient economic fundamentals continued to be supported by strong domestic demand and private investment, with approved investments reaching RM431.1 billion in 2025.
Malaysia’s total trade also exceeded RM3 trillion for the first time, reaching RM3.06 trillion.
The momentum continued into 2026, with the economy expanding 5.4% in the first quarter, while preliminary estimates indicated second-quarter GDP growth of 5.8%, placing growth on a stronger trajectory than initially projected.
Both sukuk tranches received A3 ratings from Moody’s Investors Service and A− ratings from 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% annually, representing a 15 basis-point spread over the yield of United States Treasury bills of similar maturity.
The 10-year tranche was priced at a profit rate of 4.949% annually, equivalent to a 25 basis-point spread over comparable US Treasury yields.
The investor engagement programme attracted participation from 140 high-quality international investors, including sovereign wealth funds, central banks and government institutions, asset managers, financial institutions, insurance companies and pension funds.
Geographically, investors in the 5.75-year tranche comprised Asia-based investors (76%), Europe, Middle East and Africa (EMEA) investors (19%), and United States investors (5%).
For the 10-year tranche, allocations went to investors from Asia (63%), EMEA (18%) and the United States (19%).
By investor category, the 5.75-year tranche was allocated to banks and financial institutions (43%), fund and asset managers (27%), central banks as well as corporate and private banks (15%), sovereign wealth funds and public sector institutions (8%), and insurance companies and pension funds (7%).
The 10-year tranche was distributed among fund and asset managers (59%), financial institutions and banks (30%), private and corporate banks (7%), and central banks (4%).
The issuance was conducted in accordance with Regulation S and Rule 144A under the United States Securities Act of 1933.
The sukuk will be listed on the Hong Kong Stock Exchange, Labuan International Financial Exchange and Bursa Malaysia under the Exempt Regime.
Proceeds from the issuance will be used for general Shariah-compliant purposes, including financing development expenditure and refinancing existing obligations.
CIMB, HSBC, J.P. Morgan and Standard Chartered Bank acted as Joint Lead Managers and Joint Bookrunners for the issuance.
The sukuk’s Shariah structure was approved by the Shariah Committee of CIMB Islamic Bank Berhad, HSBC Global Shariah Supervisory Committee, Standard Chartered Bank Global Shariah Supervisory Committee and the J.P. Morgan Shariah Committee. - July 24, 2026
.jpeg)
