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)
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