Sukuk Risk Profiles Could Be Altered by AAOIFI-Compliance Push

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

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.

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