AAOIFI-compliance push may alter sukuk risk profiles: Fitch


Recent innovations in and revisions to sukuk documentation to comply with the Accounting and Auditing Organisation for Islamic Financial Institutions’ (AAOIFI) Shariah standards may have implications for sukuk holders’ ranking, and sukuk rateability, as well as the issuers’ credit profiles, liquidity and ratings, according to Fitch Ratings.

Most sukuk are still structured in a way that creates an economic effect similar to conventional bonds, limiting the impact of the changes so far.

Fitch adopts a case-by-case approach when rating sukuk and will monitor and report any credit impact in its public commentaries.—AFP

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