Malaysia Issues USD 1.5 Billion Sukuk, Oversubscribed 4.7 Times to Over USD 9.5 Billion

The Malaysian government has successfully issued a total of USD 1.5 billion (approximately RM6.3 billion) in US dollar-denominated global Islamic bonds (Sukuk), which received strong demand from international investors, recording an oversubscription of 4.7 times with total orders exceeding USD 9.5 billion. The bonds priced at the lowest spread on record, reflecting continued international confidence in Malaysia’s economic prospects and fiscal reforms.

The Ministry of Finance announced today (24th) that the issuance consists of two tranches: USD 850 million with a 5.75-year tenure and USD 650 million with a 10-year tenure.

According to the statement, driven by strong demand, the final pricing for both tranches narrowed by 30 basis points from the initial pricing guidance. The 5.75-year tranche was priced at a spread of 15 basis points over US Treasury yields, while the 10-year tranche was priced at 25 basis points over US Treasury yields, both achieving the lowest spreads ever for Malaysia’s global Sukuk issuance.

The Ministry of Finance stated that this issuance not only further strengthens Malaysia’s leadership in the international capital market and global Islamic finance sector, but also establishes a new international financing price benchmark, providing an important reference for future fundraising by government-linked entities and local enterprises in the international capital market.

In addition, the Ministry noted that the issuance attracted participation from about 140 international institutional investors, including sovereign wealth funds, central banks, government agencies, asset management companies, financial institutions, insurance companies, and corporate treasury departments.

By region, investors in the 5.75-year bond tranche were comprised of 76% from Asia, followed by 19% from Europe, the Middle East, and Africa (EMEA), and 5% from the United States; for the 10-year tranche, Asia accounted for 63%, EMEA for 18%, and the United States for 19%.

Both tranches of this issuance received Moody’s A3 and S&P Global Ratings A- ratings, consistent with Malaysia’s sovereign credit rating.

The Ministry of Finance stated that the proceeds from this global Sukuk will be used for Shariah-compliant public purposes, including financing development expenditures and refinancing existing debt. The bonds will be listed on the Hong Kong Stock Exchange, Labuan International Financial Exchange, and the exempted platform of Bursa Malaysia Securities.

Second Finance Minister Dato’ Seri Amir Hamzah said the high oversubscription and record low issuance spread fully reflect international investors’ continued optimism about Malaysia’s economic prospects and their recognition of the government’s fiscal reforms, prudent debt management, and sustained growth strategies.

He said that under the MADANI economic framework, the government continues to strengthen public finances, laying a solid foundation for the country's long-term economic resilience.

He pointed out that since the implementation of the MADANI economic framework in 2023, significant results have been achieved in fiscal reforms, with the fiscal deficit having fallen from 6.4% of GDP in 2021 to 3.7% in 2025. The size of government borrowings has also dropped from 13.6% to 9% of GDP.

He stated in the announcement that robust fiscal performance coupled with sustained economic growth allows Malaysia to record economic growth rates of 5.2% for both 2024 and 2025, 5.4% in the first quarter of 2026, and a preliminary estimate of 5.8% GDP growth in the second quarter, surpassing market expectations.