The value of certification in Islamic bond offerings

Halim, Zairihan Abdul and How, Janice and Verhoeven, Peter and Hassan, M. Kabir,(2019), The value of certification in Islamic bond offerings. , Journal of Corporate Finance 55 (2019) 141–161, UNSPECIFIED

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We examine whether reputable intermediaries provide valuable certification which help corporate issuers of Islamic bonds lower their cost of capital. Our focus on Islamic bonds is motivated by the fact that besides information risk, investors also face unique Shariah non-compliance risk. Based on a sample of 3462 Islamic bond tranches issued in Malaysia from 2001 to 2014, we find certification by reputable Shariah advisors and Shariah committees is associated with a significantly lower average bond spread, as is information certification by reputable lead arrangers. Our results thus support the certification hypothesis
Keywords : Certification Reputation Islamic bonds Spread Shariah non-compliance risk, UNSPECIFIED
Journal or Publication Title: Journal of Corporate Finance 55 (2019) 141–161
Volume: 55
Item Type: Article
Subjects: Ekonomi Islam
Depositing User: Nila Nurjanah
Date Deposited: 20 Dec 2019 04:23
Last Modified: 20 Dec 2019 04:23

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