IDEAS home Printed from https://ideas.repec.org/p/ris/irtiwp/2016_005.html
   My bibliography  Save this paper

Islamic Sukuk Default and Issues in Their Resolution: The Case of Villamar Sukuk

Author

Listed:
  • Ali, Salman Syed

    (The Islamic Research and Teaching Institute (IRTI))

Abstract

Several high profile Sukuk have defaulted in recent years. The phenomenon has created upheaval in the Sukuk market and affected its development and investors’ confidence. Smooth resolution of default and bankruptcy is quite important for the financial instruments and their markets. The purpose of this study is to understand the nature and causes of the difficulties encountered in quick settlement of defaulted sukuk. It also aims to identify the Shari’ah issues faced in the resolution and settlement process. Specifically, we focus on Villamar Sukuk. It was a musharakah sukuk launched in 2008, after the issuance of the 2007 AAOIFI revised Shari’ah standard for sukuk. The Villamar sukuk was unique in that it was a musharakah sukuk without the buy-back promise, thus complying with this aspect of the AAOIFI’s revised sukuk standard. The paper analyzes: How a musharakah sukuk can ever default? What operational and structuring factors cause delay in default resolution of a musharakah sukuk? And, what lessons can be learned from this episode?

Suggested Citation

  • Ali, Salman Syed, 2016. "Islamic Sukuk Default and Issues in Their Resolution: The Case of Villamar Sukuk," Working Papers 2016-5, The Islamic Research and Teaching Institute (IRTI).
    • Handle: RePEc:ris:irtiwp:2016_005
    as

    Download full text from publisher

    File URL: http://www.irti.org/English/Research/Documents/WP/WP-2016-05.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Sukuk; Default; Insolvency; musharakah Sukuk; Shari’ah-Compliance;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ris:irtiwp:2016_005. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Research Division (email available below). General contact details of provider: https://edirc.repec.org/data/irisbsa.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.