Moody’s: Global Sovereign Sukuk Issuances to Rise in 2020 as Economies Recover from COVID-19

Despite sovereign Sukuk volumes coming in flat year-over-year (YoY) in the first half of 2020, Moody’s Investors Services (Moody’s) expects conditions to improve in the second half of 2020, as market conditions start to normalise. Moody’s expects global sovereign Sukuk issuances to increase over 40% year-over-year in 2020 to USD 92 billion.

Conventional issuances, being more expedient than Sukuk issuances, have been the preferred choice for sovereign debt management offices during the COVID-19 lockdown period. Added to this, narrowing spreads rendered Sukuk issuances more expensive, for issuers who are already dealing with high borrowing costs.

Moody’s expec...