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What explains corporate sukuk primary market spreads?

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

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Authors

Y. Ayturk

E. Aksak



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.

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
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

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