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  • Summary of Capital Requirement at Various Stages of the Contract

    • CA-3.4.28

      The following tables set out the applicable period of the contract that attracts capital charges for (a) Full Recourse Istisna'a (b) Limited and Non-Recourse Istisna'a.

      (a) Full Recourse Istisna'a
      (i) Istisna'a with Parallel Istisna'a
      Applicable Stage of the Contract Credit RW Market Risk Capital Charge
      Unbilled work-in-progress Based on ultimate buyer's rating or 100% RW for unrated buyer.

      No netting of Istisna'a exposures against Parallel Istisna'a exposures.

      (See paragraphs CA-3.4.14 to CA-3.4.22)

      (See section CA-4.2)       		Nil provided that there is no provision in the Parallel Istisna'a contract that allows the seller to increase or vary the selling price. See paragraph CA-3.4.23 If the seller is allowed to vary the selling price of the asset, then under the market risk treatment 15% capital charge on net long or short position plus 3% capital charge on gross positions.
      Amount receivable after contract billings
      Upon full settlement price by an Istisna'a buyer. NA NA
      (ii) Istisna'a without Parallel Istisna'a
      Applicable Stage of the Contract Credit RW Market Risk Capital Charge
      Unbilled work-in-progress Based on ultimate buyer's rating or 100% RW for unrated buyer. 1.6% capital charge on work in progress inventory.

      See relevant paragraphs under CA-3.4.25 to CA-3.4.26
      Progress billing to customer. Based on ultimate buyer's rating or 100% RW for unrated buyer.

      (See paragraphs CA-3.4.14 to CA-3.4.22) (See section CA-4.2)       		NA
      Upon full settlement price by and Istisna'a buyer. NA NA
      (b) Limited and Non-Recourse Istisna'a

      Istisna'a with Parallel Istisna'a (for project finance)
      Applicable Stage of the Contract Credit RW Market Risk Capital Charge
      Unbilled work-in-progress Based on project's ECAI rating if available or supervisory slotting criteria that ranges from 70% to 250% RW.

      No netting of Istisna'a exposures against Parallel Istisna'a exposures.

      (See sections CA-4.2 and CA -4.3)       		NA
      Amount receivable after contract billings NA
      Upon full settlement price by and Istisna'a buyer. NA NA
      Apr 08