It is well known that the recent global financial crisis has adversely affected the world's economy and in particular the banking industry. Islamic finance (sukuk) has also not been spared, although it has been enjoying tremendous growth since its debut in the 1970s. It had not shown any sign of slowing down until the recent global financial crisis. Sukuk has a different underlying structure and provisions in comparison to conventional bonds and it is a challenge to evaluate its sustainability during the recent global financial crisis. This paper attempts to investigate the sustainability of sukuk issuance as well as conventional finance during the recent economic downturn by focusing on the Malaysian debt capital market. Malaysia's sukuk market has grown remarkably in recent years, surpassing the outstanding amount of conventional debt securities issued in the domestic market. Despite the global economic downturn, Malaysia is still considered one of the leaders in sukuk issuance and has in fact proved to be an innovator in the development of sukuk structure. This paper examines three variables concerning the sustainability of sukuk and conventional bond issuance for the period 1990-2009; (i) GDP, (ii) foreign exchange, and (iii) market liquidity. By using ordinary least squares regression, the findings reveal that both sukuk and conventional bond issuance in Malaysia consider foreign exchange to be the major cause of bond issuance. On the other hand, unlike sukuk, conventional bond issuance does not consider the economic condition as proxied by GDP and market liquidity as a driving force. These imply insensitivity of the issuance of conventional bond compared to sukuk with regards to current economic conditions.