What explains corporate sukuk primary market spreads?

Ayturk, Y.; Asutay, M.; Aksak, E.

Abstract

This study investigates the determining factors of international corporate sukuk pricing in the primary market for the period of 2004–2015. We present novel evidence for a unique data set covering all 63 international corporate sukuk issuances consisting of both a fixed margin rating as well a credit rating score. Our cross-sectional analysis indicates that both credit rating and maturity are significant factors which reduce issue spreads, whereas sukuk margin rating increases issue spreads. More prominently, Shari’ah scholar reputation and the type of sukuk are not statistically significant factors in the explanation of the issue spread. Our results are comparable with determinants of conventional bond pricing, and our findings further confirm existing sukuk market practices.

Citation

Ayturk, Y., Asutay, M., & Aksak, E. (2017). What explains corporate sukuk primary market spreads?. Research in International Business and Finance, 40, 141-149. https://doi.org/10.1016/j.ribaf.2017.01.002

• Journal Article Type: Article
• Acceptance Date: Jan 26, 2017
• Online Publication Date: Feb 1, 2017
• Publication Date: Apr 1, 2017
• Deposit Date: Feb 8, 2017
• Publicly Available Date: Aug 1, 2018
• Journal: Research in International Business and Finance
• Print ISSN: 0275-5319
• Electronic ISSN: 1878-3384
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 40
• Pages: 141-149
• DOI: https://doi.org/10.1016/j.ribaf.2017.01.002
• Public URL: https://durham-repository.worktribe.com/output/1365735