IDEAS home Printed from https://ideas.repec.org/a/idn/journl/v12y2009i1hp97-114.html
   My bibliography  Save this article

Determinant of Sukuk Ratings

Author

Listed:
  • Tika Arundina

    (IIUM)

  • Dato’ Mohd. Azmi Omar

    (IIUM)

Abstract

With the development of sukuk market as the Islamic alternatives of the existing bond market, the issue of how to assign a rating to the sukuk issuance rises. This study tries to provide an empirical foundation for the investors to estimate the ratings assign. Using approach from several rating agencies, past researches on bond ratings, financial distress prediction and bankruptcy prediction models, this study is trying to innovate a new model on determining the sukuk ratings. It used Multinomial Logit regression to create a model of rating probability from several theoretical variables, ie. firm size, leverage, profitability, fixed payment coverage, reputation and existence of guarantor. The result shows 80% of all valid cases are correctly classified into their original rating classes.

Suggested Citation

  • Tika Arundina & Dato’ Mohd. Azmi Omar, 2009. "Determinant of Sukuk Ratings," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 12(1), pages 97-114, July.
    • Handle: RePEc:idn:journl:v:12:y:2009:i:1h:p:97-114
    DOI: https://doi.org/10.21098/bemp.v12i1.468
    as

    Download full text from publisher

    File URL: https://bulletin.bmeb-bi.org/cgi/viewcontent.cgi?article=1375&context=bmeb
    Download Restriction: no
    File URL: https://libkey.io/https://doi.org/10.21098/bemp.v12i1.468?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    Sukuk; Rating;

    JEL classification:

    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • P43 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Finance; Public Finance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:idn:journl:v:12:y:2009:i:1h:p:97-114. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Lutzardo Tobing or Jimmy Kathon (email available below). General contact details of provider: https://edirc.repec.org/data/bigovid.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.