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Determinants Of Corporate Bond And Sukuk Ratings In Indonesia

Author

Listed:
  • Afifatun Ni’mah

    (Universitas Airlangga, Indonesia)

  • Nisful Laila

    (Universitas Airlangga, Indonesia)

  • Sylva Alif Rusmita

    (UniversitassAirlangga, Indonesia)

  • Eko Fajar Cahyono

    (Corresponding Author, Universitas Airlangga, Indonesia)

Abstract

This study aims to determine the factors, both financial and non-financial, which influence corporate bond and Sukuk ratings. The results will be useful for companies, investors or related parties as additional information and references for their investment decisions. Using ordinal logistic regression models with SPSS version 21 software, the study analyses the determinants of corporate bond and sukuk ratings listed on the Indonesia Stock Exchange (IDX) for the period 2013-2017. The variables employed are profitability, liquidity, leverage, company size, securities structure and maturity date. The results of the Wald test statistics show that leverage ratio, firm size, security structure, and maturity date are the factors that influence the probability of high or low corporate bond ratings, while profitability and liquidity ratios are factors that have no effect on the level of such ratings. With regard to sukuk , profitability, liquidity, and maturity date are the factors that influence the probability of high or low corporate sukuk ratings, while leverage ratio, company size, and security structure have no effect on the ratings.

Suggested Citation

  • Afifatun Ni’mah & Nisful Laila & Sylva Alif Rusmita & Eko Fajar Cahyono, 2020. "Determinants Of Corporate Bond And Sukuk Ratings In Indonesia," Journal of Islamic Monetary Economics and Finance, Bank Indonesia, vol. 6(3), pages 689-712, August.
    • Handle: RePEc:idn:jimfjn:v:6:y:2020:i:3j:p:689-712
    DOI: https://doi.org/10.21098/jimf.v6i3.1106
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    More about this item

    Keywords

    Corporate bond; Corporate sukuk; Determinant rating; Indonesia;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

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