Fitch Ratings expects Islamic syndicated financing to sustain a positive trajectory into 2026 amid an aversion for public US dollar sukuk and bonds due to the Iran war, according to a recent release.
Issuers are leaning more into syndications, including Islamic, due to their private nature, reduced requirements, and accommodative banking systems in the Gulf Cooperation Council, Fitch said.
Proceeds raised through Islamic syndications in core markets, which include Indonesia and Malaysia among other nations, exceeded those from dollar sukuk issuance in the first quarter, compared to a slowdown in conventional syndication, the rating agency said.
In the longer term, post-war market appetite, access, and funding requirements will determine the dynamics of Islamic syndications, Fitch's global head of Islamic finance, Bashar Al Natoor, said.
Syndications serve as a key funding channel even in periods of market uncertainty, with about 65% of Fitch-rated global Islamic banks and multilaterals being investment grade, the analyst said.
Reported global outstanding Islamic syndication expanded by more than 26% year over year to $219 billion at the end of the first quarter, with Islamic syndication issued in core markets surging 294% year over year to $23 billion.