IBANK 10.3.11 Treatment of Istisna Sukuk without Parallel Istisna
(1) The risk-weight for istisna sukuk where there is no parallel istisna must be based on the issuer.
(2) If a third party provides a guarantee, the risk-weight for the istisna sukuk must be based on the guarantor, but only if the guarantor's risk-weight is lower than that of the issuer. The risk-weight for an unrated issuer or an unrated guarantor is 100%.
(3) To account for the price risk to which the underlying istisna is exposed, a risk-weight of 20% must be added in calculating the credit risk capital charge.
(4) A risk-weight of 400% applies if the returns to the sukuk holder come from the cash flow of the underlying asset (for example, a toll road or other infrastructure project).
|Derived from QFCRA RM/2015-2 (as from 1st January 2016).|