Malaysia secures record-low spreads on US$1.5 billion Global Sukuk
Demand exceeded US$9.5 billion, with the Finance Ministry reporting oversubscription of 4.7 times across two tranches.
Malaysia’s US$1.5 billion Global Sukuk, issued in late July 2026, attracted orders exceeding US$9.5 billion, the Finance Ministry said. The ministry reported that the two-tranche offering was oversubscribed 4.7 times and achieved Malaysia’s narrowest Global Sukuk spreads.
In a written parliamentary reply, the ministry attributed the pricing to investor demand, which enabled a 30-basis-point (bps) reduction in each tranche’s spread from the initial guidance.
The 5.75-year tranche carried a spread of 15 bps over the 5-year US Treasury benchmark, whose annual rate was 4.612 per cent. The spread for the 10-year tranche was 25 bps over the corresponding US Treasury benchmark, with an annual rate of 4.949 per cent.
Despite Malaysia’s A3 sovereign credit rating, the ministry said the spreads were nearly comparable with pricing obtained by A1- and AA2-rated countries. It linked investors’ confidence in Malaysia’s credit outlook to macroeconomic fundamentals, fiscal discipline and continuing structural reforms.
Government offshore debt after the issuance totalled RM23 billion, representing about 1.7 per cent of federal debt, according to the ministry. That amount remained below the RM35 billion legal ceiling set by the Foreign Loans Act 1963. The ministry added that the relatively small offshore exposure helped limit risks from currency movements and uncertainty in international markets.
