Another First and Best Again by Iran Fara Bourse

Friday, 29 January 2021


Issuing Sukuks Rely on Credit Rating in Debt Market

The securities will be underwritten in Iran Fara Bourse. It is a promising solution to facilitate fundraising through the debt market.

PAYA credit rating co. has granted Mehr Ayandegan Financial Development Group (MFDG) A+ for long-term time horizons and A-1 for short-term horizons with a stable outlook perspective. A stable outlook indicates that the rating most probably will stay at the same level.

Principal and interest guarantee is one of the critical challenges private-sector gets involved when raises funds via debt market. In the traditional method, all the risks are shifted to the issuers so it burdens or may affect issuers’ main business.” Said Neda Bashiri, SFP market manager.

We took lots of measures to select a single best solution facilitating fundraising. we utilize credit rating agencies besides the underwriting and guarantor body. In the new mechanism, neither principal nor the interests are guaranteed, but rather by “the full faith and credit” of the issuer. In other words, the investor has the issuer’s promise to repay but has no claim on specific collateral. received ratings A+ and A-1 to issue Ijara Sukuk, senior secured tranche. The obligor’s capacity to meet its financial commitments on the obligation is extremely strong. PAYA has scrutinized MFDG ‘s financial position in many aspects such as solvency, competency, terms of the contract, priority of Sukuk payments to any other obligations and perspectives. PAYA totally ensured us regarding risks of insolvency and default situations.”

The minimum order for underwriting under the book building method is 50,000 sheets (at a nominal price of 1,000,000 IRR).

Some precautionary terms were also added to these securities such as marked symbols, Investors’ obligation to sign IPS, and ratings’ regular monitoring.