CA-3.4.39
The following tables set out the applicable period of the contract that attracts capital charges where the
(a) Exposure to customer
(i) Istisna'a with Parallel Istisna'a
| Applicable Stage of the Contract | Credit RW | Market Risk Capital Charge |
| Unbilled WIP inventory |
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-3.4.13 to CA-3.4.19) (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-3.4.20. If the seller is allowed to vary the selling price of the asset, then under the |
| Amount receivable after contract billings | ||
| Upon full settlement of the purchased 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 |
| Amounts of progress payments to suppliers for WIP inventory. |
None (no ultimate Istisna'a customer) See |
15% for WIP inventory See |
(b) Exposure to asset
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 WIP inventory |
Based on buyer'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 of the purchased price by an Istisna'a buyer. | NA | NA |
January 2015