Fitch projects moderate growth in Islamic syndicated financing for 2H26

August 05, 2026 (MLN):  Fitch Ratings has projected that global Islamic syndicated financing will grow moderately in the second half of 2026 (2H26), remaining a key funding source concentrated in Saudi Arabia, the UAE, Egypt and Turkiye, as entities increasingly turn to channels such as Islamic syndications amid challenges facing GCC sukuk and bond issuance from Iran war-related volatility, rising yields and execution complexities.

According to the rating agency, Islamic and conventional syndications offer benefits over sukuk and bonds, including faster execution, fewer counterparties, private nature and longer tenors.

Fitch's Global Head of Islamic Finance, Bashar Al Natoor, held that many GCC Islamic banks and multilaterals are likely to participate in syndications as both financiers and issuers, supported by adequate liquidity and lower expected GCC sukuk and bond supply.

He added that GCC banks' credit standards are likely to remain more selective given macro volatilities, noting that around 64% of Fitch-rated Islamic banks and multilaterals were rated investment grade on the international scale at the end of 1H26.

Global Islamic syndication issuances declined in the second quarter of 2026 (2Q26) as some issuers returned sporadically to the bond and sukuk markets.

In core markets, reported Islamic syndications stood at a sizeable $20.2bn in the first half of 2026 (1H26), down 25% year-on-year, while conventional syndications remained the larger segment at around $85bn, posting flat growth.

Consequently, the Islamic share of total syndication issuances in core markets fell to about 19% in 1H26, compared with 24% in 1H25. Tenors for Islamic syndications typically range between one and 40 years, with industrial firms accounting for the largest share.

The report cited Avolon Holdings Limited (BBB/Stable), a leading global aircraft lessor, which raised a $455mn credit facility from Middle Eastern banks that partly included an Islamic tranche, while Boubyan Bank K.S.C.P. (A/Stable) raised $300mn through an Islamic syndicated facility that saw large participation from Chinese banks.

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