Document Type
Article
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.JEL Classification: C35, E43, P43Keywords: Sukuk, rating.
Recommended Citation
Arundina, Tika and Omar, Dato’ Mohd. Azmi
(2009)
"DETERMINANT OF SUKUK RATINGS,"
Bulletin of Monetary Economics and Banking: Vol. 12:
No.
1, Article 4.
DOI: https://doi.org/10.21098/bemp.v12i1.468
Available at:
https://bulletin.bmeb-bi.org/bmeb/vol12/iss1/4
First Page
97
Last Page
114
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License
Country
Malaysia
Affiliation
International Islamic University Malaysia
