Nigeria Industry Research: Banking

Image placeholder
Credit Spotlight: Additional Considerations for Rating Islamic Finance Institutions and Sukuk
  • Nigeria Industry Research: Banking
  • Year : Aug 2021
Access Now
Summary

GCR’s ratings on Islamic Finance institutions (IFI) and sukuk are not subject to distinct ratings criteria, despite very specific features. Our core framework and sector specific criteria, alongside the below addendum, will therefore be used to frame the ratings on IFI. However, GCR does recognise that emphasis will be placed on such factors as liquidity management, risk concentrations and collateralisation when analysing IFI.

Additional Information

Asset-backed sukuk, like conventional securitisation, take shariah-compliant assets on the issuer’s balance sheet and sell the ownership rights (on a true-sale basis) to a special purpose vehicle at the cost of the issuance value. Consequently, all cash flows generated from the pool of assets service the coupons. Like any conventional securitisation transaction sukuk can be subject to ‘tranching’. Similar to conventional bonds (albeit for different reasons), sukuk instruments can differ significantly regarding the equity and debt like content within contract.

Related Publication

Credit Spotlight: Additional Considerations for Rating Islamic Finance Institutions and Sukuk

GCR’s ratings on Islamic Finance institutions (IFI) and sukuk are not subject to distinct ratings criteria, despite very specific features. O...

WSTC Financial Services Limited (2019-09)

A Credit Rating report is a research report providing detailed analysis utilised by GCR in the accordance of a Credit Rating.

The Importance of Portfolio Covenants and Early Amortisation Triggers in Revolving Securitisation Transactions

Securitisations are either structured as amortising or revolving transactions whereby the principal collections from the asset portfolio are used t...

Available Purchase Options: