(Adds context, information on trading)
DUBAI Jan 20 The Malaysia-based International
Islamic Liquidity Management Corp expanded its sukuk issuance
programme on Monday by auctioning $860 million of three-month
Islamic bonds at a yield of 0.55635 percent.
The issue brings the total amount of the IILM's outstanding
sukuk to $1.35 billion, the body said in a statement. Its
programme, launched last year, envisages issuance increasing
eventually to as much as $2 billion.
The IILM, owned by a consortium of central banks from Asia,
the Middle East and Africa, is seeking to help Islamic banks
manage their short-term funding needs by easing their shortage
of liquid, investment-grade financial instruments.
Monday's issue was sold to nine primary dealers from Asia,
the Middle East and Europe.
The IILM's ultimate aim is to encourage the development of
an active, cross-border secondary market in sukuk, but a lack of
liquidity has so far prevented that.
Since the programme's launch, primary dealers have held on
to the IILM instruments after auctions and there has been little
if any secondary market trade in them, an official at one of the
primary dealers told Reuters.
(Reporting by Andrew Torchia; Editing by Mark Heinrich)