Pakistan sets benchmark with Hybrid Sukuk debut

April 17, 2026 (MLN):  Pakistan has successfully launched its first-ever Government Hybrid Sukuk, which raised strong investor interest and marking a major milestone in the country’s Islamic finance landscape.

The inaugural issuance, completed on April 16, 2026, combined two Shariah-compliant structures an Ijarah Sale & Lease Back (SLB) and a Commodity Murabaha allocating 55% and 45% of proceeds respectively, according to a press release issued.

Offered through an auction mechanism, the Sukuk included a 1-year fixed-rate discounted instrument and a 10-year variable rental rate (VRR) instrument.

The total target of Rs200 billion was oversubscribed by 1.45 times, with accepted bids amounting to Rs 109.297 billion.

The cut-off rental rates were set at 11.8000% for the 1-year Sukuk and 11.7185% for the 10-year VRR.

The issuance was spearheaded by the Debt Management Office (DMO) of the Ministry of Finance (MoF), in collaboration with the State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP). Joint Financial Advisors included Meezan Bank Limited (MEBL), Bank Alfalah Limited (BAFL), Dubai Islamic Bank (DIB), and BankIslami Pakistan Limited (BIPL).

Capital Market Infrastructure Institutions (CMIIs) involved in the process were Pakistan Stock Exchange Limited (PSX), National Clearing Company of Pakistan Limited (NCCPL), Central Depository Company of Pakistan Limited (CDCPL), and SCB Sadiq.

Director Domestic Debt, Mr. Khaliq Uz Zaman, described the hybrid structure as a key milestone for expanding Pakistan’s Shariah-compliant debt market.

He noted that the initiative would help diversify the investor base, deepen the domestic debt market, and contribute to lowering borrowing costs over time.

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