Fitch Ratings has reported that sukuk, which are financial instruments compliant with Islamic law, demonstrated strong resilience and credit quality in 2025. The agency highlighted that over 80% of these instruments achieved investment-grade status. Additionally, sukuk have been expanding into new markets, with first-time ratings in countries such as Australia, the UK, and Sri Lanka.
Bashar Al Natoor, Global Head of Islamic Finance at Fitch Ratings, noted, “First-time Fitch-rated sukuk are emerging in markets such as Australia, the UK, and Sri Lanka, despite sukuk’s additional structural complexities.” He added, “Over 80% of Fitch-rated sukuk were investment grade in 2025, with over 90% of issuers having Stable Outlooks, and no defaults over the past four years.”
In Sri Lanka, Vidullanka PLC issued the country’s first sukuk, which received an ‘A+(lka)’ rating from Fitch. Meanwhile, coverage remains concentrated in the Middle East and Asia, with the majority of rated sukuk being senior unsecured. However, a growing portion is subordinated, reflecting the industry’s maturity. Maturity profiles tend towards medium-term sukuk.
Fitch provided ratings for Australia’s first sharia-compliant notes (Macquarie Group Limited, ‘A’), the UK’s first public sharia-compliant RMBS from a non-bank lender (Meridian Funding 2025-1 plc), and Sri Lanka’s first sukuk (Vidullanka PLC, ‘A+(lka)’). The agency also rated the largest sukuk from Africa, issued by Egypt (‘B’), Turkiye’s first corporate sukuk (Turk Telekom), and the first sukuk with payment-in-kind features. State investment funds, including the UAE’s Mubadala, Saudi Arabia’s Public Investment Fund, and the Turkiye Wealth Fund, also issued sukuk.
Fitch has rated over 73% of outstanding US dollar sukuk, most of which are denominated in dollars. The value of Fitch-rated sukuk outstanding increased by 23% year-on-year to USD 240 billion by the end of 2025, with global issuance surpassing USD 300 billion—a 25% increase to record levels. The agency anticipates that issuance will slow during Ramadan in the first quarter of 2026.
Most sukuk are rated in the ‘A’ category (39%), followed by ‘BBB’ (26.2%) and ‘BB’ (10.5%). In 2025, Fitch upgraded Oman to ‘BBB-’ and Pakistan to ‘B-’, which also resulted in related sukuk upgrades. Although most sukuk are asset-based, the supply of asset-backed sukuk is growing, particularly from supranational and UK issuers. The structures are predominantly bullet and fixed-rate, with about 12% categorized as ESG sukuk.
