THE EFFECT OF SUKUK STRUCTURE AND SUKUK GUARANTEE STATUS ON SUKUK RATING IN INDONESIA STOCK EXCHANGE 147 Published by AFEBI Islamic Finance and Economic Review This is an open access article under the CC BY SA license (https://creativecommons.org/licenses/by/4.0/) THE EFFECT OF SUKUK STRUCTURE AND SUKUK GUARANTEE STATUS ON SUKUK RATING IN INDONESIA STOCK EXCHANGE Kiran Salsabilah1)*, Abdul Hamid Habbe2), Nirwana3) 1,2,3Departement of Accounting, Faculty of Economy and Business, Hasanuddin University, Indonesia Abstract This research aims to analyze the effect of sukuk structure and sukuk guarantee status on sukuk rating. The research was conducted based on companies in the financial sector and non-financial sector listed on the Indonesia Stock Exchange and included in the rating conducted by PT Pefindo for the period 2015-2019. A total of 65 samples were selected using purposive sampling method. The data source in this study is secondary data in the form of the company's annual financial statements. The data analysis methods used are ordinal logistic regression analysis The results showed that the sukuk structure has an opportunity to lower the sukuk rating, while the sukuk guarantee status has the opportunity to increase the sukuk rating. Then for simultaneous test results, sukuk structure and sukuk guarantee status have an effect on sukuk rating. Key Words: Sukuk Structure, Sukuk Guarantee Status, Sukuk Rating 1. INTRODUCTION In Islam, the property owned by every human being is only a deposition from Allah SWT as the sole absolute owner of all His creations. Human beings are only limited to carrying out the mandate of Allah SWT to manage and utilize property in accordance with His provisions. One form of management and utilization of property in Islam is investment. Investment according to Islam is the investment of funds or investment of capital for a particular field whose activities are not contrary to sharia principles either, the object or the process. Generally, the purpose of investment is to make the property owned more productive. The development of investment forms today is not only limited to investment in the real sector, but also developing into the non-real sector that is investment in financial assets or commonly referred to as indirect investment with various forms of instruments. The capital market becomes a forum for investing in financial assets. In Indonesia, the term for the capital market is the Indonesia Stock Exchange or commonly abbreviated to IDX. A wide range of financial instruments are traded without the exception of products in accordance with sharia principles. Sukuk is one form of Islamic financial instruments in the capital market that is growing very rapidly and promising opportunities. Sukuk according to the Fatwa of the National Sharia Council (DSN) No.32/DSN- MUI/IX/2002 is a long-term securities based on sharia principles issued by the company (issuer) to sukuk holders provided that they will get a revenue share and pay back sharia bond funds at maturity. Sukuk becomes a financial instrument where the market is very responsive. Responsive stock market reaction is projected one of them by looking at abnormal return as a measurement indicator. Rizaldi (2020) in his research shows that there is a significant abnormal return around the date of issuance of sukuk in the period 2014-2019 which means that investors respond to sukuk issuance. Sukuk has a privilege *Corresponding author. Email address: kiransalsabilahhh08@gmail.com https://creativecommons.org/licenses/by/4.0/ mailto:kiransalsabilahhh08@gmail.com AFEBI Islamic Finance and Economic Review (AIFER) Volume 6, No 2 (2021) 148 Published by AFEBI Islamic Finance and Economic Review This is an open access article under the CC BY SA license (https://creativecommons.org/licenses/by/4.0/) in the eyes of investors compared to other Islamic financial instruments. Sukuk provides a more competitive income or profit sharing ratio and is paid monthly in rewards and face value up to sukuk maturity. In addition, investors can earn additional income in the form of margin (capital gain), and can avoid elements that are prohibited in peace such as riba, gharar and maysir. Table 1. Corporate Sukuk Development Data in Indonesia Sukuk issuance is distinguished into two namely, corporate sukuk and state sukuk. The rapid and consistent development of corporate sukuk in Indonesia rose from 2015 to October 2020 as presented in table 1 reaching 271 sukuk issuances with an accumulated issuance value of 54.54 trillion and an outstanding sukuk of 163 with a value of 31.89 trillion. This increased from year to year with an accumulation of sukuk issuance by 211% (OJK, 2020). The increase of an average of 30% annually for the issuance of state sukuk also shows that sukuk is very promising especially in its contribution in financing the State Budget (APBN). The total accumulation of state sukuk issuance until October 2018 has reached more than 950 trillion with outstanding as of October 25, 2018 of 657 trillion (Ministry of Finance, 2018). Investors' interest in sukuk makes investors seek a lot of information about the risks and profits that will be obtained. Based on the theory of signals according to Bringham and Houston (2016:488), the information obtained by investors is a signal that will influence investment decisions in the future. In the application of signal theory, the informant can choose what and how the information will be displayed and the recipient can choose how to interpret the information received, but according to Raharja and Sari (2008) the information obtained is still unbalanced or asymmetric information. Based on the problem according to Sudaryanti (2011) the assessment indicator of sukuk can be seen from the rating or rating of sukuk. Event of default of sukuk investment has occurred in Indonesia at PT. X. PT. X is a company engaged in sea transportation and liquid cargo. The company issued sukuk ijarah in 2007 and 2009. The failure occurred because the company still has not implemented the mechanism of implementation of sukuk ijarah as stipulated and determined so that it fails to meet the agreed obligations. Two main issues in the mechanism of implementation of sukuk ijarah PT X are related to sukuk structure and collateral status of underlying assets. The failure of company X resulted in PT. Pefindo in 2012 stated the default condition on the issuance of sukuk ijarah PT X and lowered the sukuk rating to non-investment grade (idD) category (Pranata, 2014). The failure of PT X is certainly become a concern for the company and especially as an investor, so it is important for them to always pay attention and monitor sukuk performance through sukuk ratings. According to Borhan and Ahmad (2018), the rating Year Accumulated Number of Sukuk Issuances Accumulation Percentage Increase Accumulated Value of Sukuk Issuance (Trillions) Total of Sukuk Outstanding Outstanding Value (Trillions) 2015 87 17% 16,66 47 9,9 2016 102 20,43 53 11,9 2017 137 57% 26,39 79 15,7 2018 175 101% 36,12 99 21,3 2019 232 167% 48,24 143 29,83 October 2020 271 211% 54,54 163 31,89 Source: Otoritas Jasa Keuangan (2020) https://creativecommons.org/licenses/by/4.0/ THE EFFECT OF SUKUK STRUCTURE AND SUKUK GUARANTEE STATUS ON SUKUK RATING IN INDONESIA STOCK EXCHANGE 149 Published by AFEBI Islamic Finance and Economic Review This is an open access article under the CC BY SA license (https://creativecommons.org/licenses/by/4.0/) can be a signal that indicates a category worthy or unfit to invest sukuk, in addition the rating can also reduce the potential for asymmetric information from sukuk issuer and investors. Sukuk rating describes the probability of debt failure and risk of the company becoming an issuer. The better the rating of the sukuk, the lower the probability of debt default and the risk it will get. Furthermore, Hadinata (2020) concluded that in anticipation of the default risks that will occur in making sukuk investments, it is important to conduct an initial analysis of sukuk ratings issued by rating agencies. In increasing secondary market activities to assist the public in determining the right investment options, the Financial Services Authority (OJK) recognizes the existence of rating agencies that aim to rank bonds and sukuk. In Indonesia, the rating agencies are PT Pefindo (Indonesian Securities Rating) and PT. Kasnic Rating Agency, but most companies that issue sukuk on the Indonesia Stock Exchange get a rating through PT Pefindo. The rating conducted by PT Pefindo is by dividing sukuk rank into two categories, namely investment grade and non-investment grade. Sukuk rating methodology conducted by PT. Pefindo adopts from the rating process on conventional bonds by looking at the business and financial aspects of the company, while also looking at risks that can affect the ability of the company to pay off its obligations, namely industrial risk assessment, financial risk and business risk. This is in line with the theory presented by Bringham and Houston (2016:488) that there are two factors that can affect a bond's rating. First, quantitative factors in the form of financial ratios and Second, qualitative factors in the form of structure, age, guarantee provisions, stability, regulation, environment and so on. In detail the approach will be varied based on the characteristics of the business / industry run by the company (Pefindo, 2019), but there is no more detailed explanation of what variables are used in assessing sukuk rating. The assessment of PT. Pefindo in the process of rating bonds and sukuk is essentially based on risk assessment of the company's ability to perform its obligations as promised at the beginning of the investment process to investors. According to Innasativa research (2018) which examines the comparison of sukuk and bond risk using Value at Risk (VAR) measuring instruments states that sukuk has a lower risk than bonds. The factors that cause the difference in risk is the first, sukuk structure in the form of return that uses the concept of fee / revenue sharing is not an uncertain interest rate and secondly, the existence of underlying assets as the basis of sukuk issuance. The difference in nature that makes the risks posed in terms of sukuk investments and bonds is different. Furthermore, in innasativa research (2018) stated that both factors that make investors feel safer and feel advantaged in making sukuk investments. Based on the risk assessment, researchers are interested to see the influence of two variables, namely sukuk structure and sukuk guarantee status on sukuk rating that will be given by PT. Pefindo. Inconsistent results of the study related to the influence of sukuk structure and sukuk guarantee status on sukuk ratings encouraged researchers to re-examine both variables by developing from previous studies. This research is important to see how consistent the results of previous research. Although there has been a lot of research on variables that affect sukuk rating, the results of the study are diverse. This is due to differences in the properties of independent variables (X), measuring instruments of dependent variables (Y), research populations and data analysis methods. The motivation of this study is also to provide beneficial information on Sukuk rating and concrete evidence regarding its determinants to all parties that are interested in issuing Sukuk and investing in Sukuk. This research hopes to shed light on the determinants of Sukuk rating and thus may become a beneficial point of reference to all Sukuk rating users and to the Islamic capital market in general. https://creativecommons.org/licenses/by/4.0/ AFEBI Islamic Finance and Economic Review (AIFER) Volume 6, No 2 (2021) 150 Published by AFEBI Islamic Finance and Economic Review This is an open access article under the CC BY SA license (https://creativecommons.org/licenses/by/4.0/) 2. LITERATURE STUDY 2.1 Signalling Theory Signalling theory is information in the form of instructions or signals needed by investors to make decisions. The information will help investors to see the company's future prospects. This is supported by Signal Theory according to Brigham and Houston (2016:488), which is a management behavior within the company in providing guidance to investors related to management's view of the company's future prospects. Signals in the form of financial and non-financial information can become a signal to external parties that the company has a good or bad prospect in the future. This is the basis of the importance of a company choosing strong information so that the signal provided can change the assessment of external parties to the company and can reduce the risk of information assimilation in an entity. Asymmetrical information occurs because of one party that has better information than other interested parties (Raharja and Sari, 2008). The form of signal given to external parties can be in the form of bond rating information published. For example, bond issued by the companies. The company signals about a particular financial ratio can predict bond ratings. Information in the form of published bond rating is expected to be a signal of the company's condition. 2.2 Sukuk Structure According to Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) Sharia Standards No.17 (2017), there are 14 types of sukuk with 7 types of sukuk commonly used in sukuk market namely sukuk murabahah, sukuk salam, sukuk istishna, sukuk ijarah, sukuk musyarakah, sukuk mudharabah and sukuk hybrid. According to Fitrianingsih (2017) sukuk structure will be formed based on the contract used in sukuk issuance. In Indonesia, the use of sukuk that is growing and widely used until now is sukuk ijarah and sukuk mudharabah (OJK, 2020). Consideration of sukuk selection is influenced by the financing needs of the company as well as the sukuk structure, namely the yield offered. Sukuk structure will affect the risk that will be obtained by investors and companies because the selection of contracts used is also different and the yield offered is also certainly different. This is supported by research conducted by Muliana (2018) that investors prefer sukuk ijarah because the yield offered in the form of fees is more certain than sukuk mudharabah. Further research examining whether sukuk structures affect sukuk ranks has also been conducted in the malaysian capital market namely by Abulgasem et al. (2015) and Borhan and Ahmad (2018). The results stated that the structure of sukuk has a significant effect on sukuk rank. Similar results were also obtained by Puspita Sari (2020) which researched in the scope of capital market in Indonesia. In his research also stated that sukuk structure significantly affects sukuk rating. 2.3 Sukuk Guarantee Status Underlying assets become a mandatory requirement in issuing sukuk. This makes sukuk not including debt securities but called investment securities (Direktorat Pembiayaan Syariah, 2015). The existence of underlying assets can be guaranteed or not guaranteed. The situation requires sukuk publishers to provide additional information about the bail status of sukuk. The regulation is contained in The Financial Services Authority Regulation No. 18/POJK.04/2015. According to Borhan and Ahmad's research (2018), sukuk given guarantee will have a higher rating than unsecured sukuk. Furthermore, Aulya (2019) in his research stated that the guaranteed sukuk will attract more investors because the risks that investors will receive are less likely. Although the company is well known and earns trust and goodwill, it is not enough if the company does not provide guarantees to investors. This is because investors do not want any risk of https://creativecommons.org/licenses/by/4.0/ THE EFFECT OF SUKUK STRUCTURE AND SUKUK GUARANTEE STATUS ON SUKUK RATING IN INDONESIA STOCK EXCHANGE 151 Published by AFEBI Islamic Finance and Economic Review This is an open access article under the CC BY SA license (https://creativecommons.org/licenses/by/4.0/) default in the future, so guarantees are important in issuing sukuk. The same result was also obtained by Puspita Sari research (2020) which stated that the status of the guarantee had a significant effect on sukuk rating. 2.4 Sukuk Rating Sukuk rating is a standardization given by a well-known and trusted securities rating agency, PT Pefindo (Indonesian Securities Rating) that has cooperated with IDX (Indonesia Stock Exchange) to sukuk issuers and which can provide a level of trust for investors in interest payments and principal in accordance with their agreed schedule. PT. Pefindo provides sukuk rating on risk analysis conducted objectively, independently and accountably. The categories used in determining ratings are: a. Investment Grade, which is a category of sukuk rating that the company or country is considered to have the ability to fulfill its obligations as an issuer. b. Non-Investment Grade, which is a rating category that states that the company or state is considered doubtful in fulfilling its obligations as an issuer. 2.5 Research Hyphotesis Based on the background of the problems that have been presented, the basis of the theory, and the results of previous research, the following hypotheses are produced: H1: Sukuk structure positively affects sukuk rating H2: Sukuk guarantee status positively affects sukuk rating H3: Sukuk structure and sukuk guarantee status simultaneously affect Sukuk rating 3. RESEARCH METHODOLOGY Research on the influence of sukuk structure and sukuk guarantee status on the company's sukuk rating is a type of quantitative research with a form of causal relationship. The data taken in this research test is secondary data. The population in this study is financial and non-financial companies listed on the Indonesia Stock Exchange (IDX) in 2015-2019. The research samples were selected using purposive sampling techniques, with the following criteria: Table 2. Sampling Selection No. Criteria Number of Companies Number of Sukuk 1. Companies (financial and non-financial sectors) that issue sukuk on the Indonesia Stock Exchange (IDX) and sukuk are still outstanding for the period 2015-2019 8 15 2. Companies not registered with PT. Pefindo in the period 2015-2019 (1) (2) 3. Companies that do not post annual reports for the period 2015-2019 in a row 0 4. Companies that do not publish full annual financial statements and have been audited for the period 2015-2019 ended December 31, respectively. 0 5. Have data related to complete research variables 0 Total companies and sukuk sampled 7 13 Total research sample (13 sukuk x 5 years) 65 Source: Processed Data (2021) Dependent variable in this study is sukuk rating issued by PT. Pefindo While the independent variables in this study is the structure of sukuk that is projected with the contract used and the status of sukuk guarantee is projected with additional information related to the underlying asset used. The following is the operational definition of each research variable: https://creativecommons.org/licenses/by/4.0/ AFEBI Islamic Finance and Economic Review (AIFER) Volume 6, No 2 (2021) 152 Published by AFEBI Islamic Finance and Economic Review This is an open access article under the CC BY SA license (https://creativecommons.org/licenses/by/4.0/) 3.1 Sukuk Rating The measurement of sukuk rating in this study is based on the rating standard issued by PT Pefindo and its grouping refers to PT Pefindo's partner Standard &Poor which is the rating symbol divided into three more specific categories which are very worthy of investment (AA+ to AAA), investment worthy (BBB- to AA-) and less investment worthy (CCC to BB+) (Azis, 2015:107-108). The grouping is then converted into the following form of value: very worthy of investment (AA+ to AAA) worth 3, worth investment (BBB- to AA-) worth 2, and less worthy of investment (CCC to BB+) worth 1. The scale used in this measurement is the ordinal scale. According to Junaidi (2015), ordinal scale is a measurement scale that states a category that is tiered. 3.2 Sukuk Structure Sukuk structure is an agreement used in the issuance of sukuk grouped based on the payment scheme or return offered. In Indonesia the majority of sukuk issuance uses mudharabah and ijarah agreements. Sukuk structure used for mudharabah contract is a revenue share with floating return because it is adjusted to the profit obtained and for the ijarah contract is a margin / fee with a fixed income or fixed return. The scale used to measure sukuk structure in this study is nominal scale using dummy variables and grouping data in two different categories namely, 1 for Sukuk Mudharabah category sukuk and 2 for Sukuk Ijarah category sukuk (Abulgasem et al., 2015) 3.3 Sukuk Guarantee Status Sukuk guarantee status is additional information or information from the existence of objects that are used as underlying assets in sukuk issuance by seeing if the object is guaranteed or not. Disclosure of additional information such as warranty information covering at least the type, value, and status of ownership (if any) as well as the acquisition of assets that are the basis of sukuk consists of at least the type or form of assets, the location of the asset, the status of ownership of the asset, the status of the asset (as collateral or not) and the accompanying legal and economic implications (if any), and also the value of the asset based on the assessment results of the assessor will clarify the risk of the existence of sukuk underlying assets that are the basis of sukuk issuance. This is stated in The Financial Services Authority Regulation No. 18/POJK.04/2015. Sukuk guarantees can also be provided by insurers, banks, funds, or government authorities (Borhan and Ahmad, 2018). Measurement of this variable uses a nominal scale using dummy variables with criteria 2 if the sukuk uses a guarantee and is worth 1 if there is no guarantee (Rahayuningsih, 2016). The method of data analysis used in testing hypotheses in this study is ordinal logistics regression analysis, which is done using SPSS Software. The models of logistics ordinal regression equations in this study are: (Logit (p1+p2+…p5) = α +β1X1+ β2 X1 + e………………………………..…………(1) Description: (Logit (p1+p2+... p5) = Probability of sukuk rating (Y) issued by Pefindo α = Constant β1-2 = Regression coefficient X1 = Sukuk structure X2 = Sukuk guarantee status e = Coefficient of error https://creativecommons.org/licenses/by/4.0/ THE EFFECT OF SUKUK STRUCTURE AND SUKUK GUARANTEE STATUS ON SUKUK RATING IN INDONESIA STOCK EXCHANGE 153 Published by AFEBI Islamic Finance and Economic Review This is an open access article under the CC BY SA license (https://creativecommons.org/licenses/by/4.0/) 4. RESULT AND DISCUSSION 4.1 Descriptive Statistical Analysis Descriptive statistical analysis in this study aims to describe the variables used with the analysis tools used are average (mean), standard deviation, maximum value and minimum value. The variables used in this study are the sukuk structure as the first independent variable, the guarantee status of sukuk as the second independent variable and the sukuk rating as a dependent variable. The results of the analysis of descriptive statitic data are presented in the following table: Tabel 3. Descriptive Statistical Data Analysis Results Variabel N Min Max Mean Std. Deviation Sukuk_Structure 65 1 2 1,77 ,425 Sukuk_Guarantee Status 65 1 2 1,15 ,364 Sukuk_Rating 65 1 3 2,45 ,662 Valid N (listwise) 65 Source: Processed Data (2021) Based on the results obtained in Table 3, it can be known that the number of data (valid N) amounted to 65 samples from 7 companies with a total of sukuk is 13 sukuk that have passed the criteria of previous sample selection. In addition, it can be known that for variable sukuk structure and sukuk guarantee status is measured on a nominal scale while for sukuk rating variables are measured on an ordinal scale. The results of the analysis of the first independent variable descriptive statistical data, namely the sukuk structure, showed a minimum value of 1 and a maximum of 2 with an average value of 1.77 and a standard deviation of 0.425. For the second independent variable, the status of sukuk guarantee shows the minimum value is 1 and the maximum is 2 with an average value of 1.15 and the standard deviation of 0.364 and for dependent variables that is sukuk rating shows the minimum value of 1 and the maximum value is 3 with an average value of 2.45 and standard deviation of 0.662. From the results of descriptive statistical description all variables can be known that the value of the average is greater than the standard deviation. This indicates that the quality of the data obtained is quite good because the average value is greater than the standard deviation on each variable identifying that the standard error of the variable is low. 4.2 Ordinal Logistics Regression Analysis The analysis used in this study is an ordinal logistics regression analysis conducted using the SPSS program. Ordinal logistics regression model is used because dependent variables namely sukuk rating have several categories that are multilevel. The following are the results of the estimation of the ordinal logistics regression model of the influence of sukuk structure and sukuk guarantee status on sukuk rating: Table 4. Results of Estimated Parameters of Ordinal Logistics Regression Model Parameter Estimates Estimate Std. Error Wald df Sig. 95% Confidence Interval Lower Bound Upper Bound Threshold [Sukuk_Rating = 1] -,694 ,651 1,139 1 ,286 -1,969 ,581 https://creativecommons.org/licenses/by/4.0/ AFEBI Islamic Finance and Economic Review (AIFER) Volume 6, No 2 (2021) 154 Published by AFEBI Islamic Finance and Economic Review This is an open access article under the CC BY SA license (https://creativecommons.org/licenses/by/4.0/) [Sukuk_Rating = 2] 3,003 ,941 10,192 1 ,001 1,160 4,847 Location [Sukuk_Structure=1] -3,710 ,833 19,837 1 ,000 -5,342 -2,077 [Sukuk_Structure =2] 0a . . 0 . . . [Sukuk_Status=1] 4,864 1,046 21,612 1 ,000 2,813 6,915 [Sukuk_Status=2] 0a . . 0 . . . Source: Processed Data (2021) Based on the results obtained in Table 4, the logistics regression equation is generated as follows: logit [P(Y≤1|x)]=-0,694- 3,710x1+4,864x2……………………………………….…..(2) logit [P(Y≤2|x)]=3,003- 3,710x1+4,864x2………………………………...…………(3) Description: logit [P(Y≤1|x)] = Probability rating sukuk (Y) published by Pefindo -0,694 = Sukuk Structure Probability constant 3,003 = Sukuk guarantee status probability constant -3,710 X1 = Regression coefficient of sukuk structure 4,8464 X2 = Regression coefficient of sukuk guarantee status 4.3 Hypothesis Test a. Goodness of Fit Test The goodness of fit test is conducted to find out the ordinal logistic regression model obtained is worth using deviance method test. The criteria of the model is said to be feasible if the value of significance obtained is greater than the value of the level of research significance of 0.05. Deviance shows a measure of how much variety the logistics regression model cannot explain. Here are the results: Table 5. Model Goodness of Fit Test Results Goodness-of-Fit Chi-Square Df Sig. Pearson 1,964 2 ,072 Deviance 5,364 2 ,233 Source: Processed Data (2021) Based on the results in Table 5 obtained chi-square value in deviance method test of 5,364 and significance value of 0.233. Because the significance value obtained is greater than the value of the level of research significance of 0.05, it can be said that the data generated from the observation of the research in accordance with the prediction of the ordinal logistics regression model to be used and means that the model used in this study is a good model or logit model obtained is worth using. b. Model Fitting Information Test The model of fitting information or simultaneous parameter test aims to determine whether or not there is a significant influence of all free variables (independent) on dependent variables. In simultaneous tests used the results of the statistical test G. Variables used in this study are Sukuk Structure (X1) and Sukuk Guarantee Status (X2) as independent variables and Sukuk Rating (Y) as dependent variables. Here are the results: https://creativecommons.org/licenses/by/4.0/ THE EFFECT OF SUKUK STRUCTURE AND SUKUK GUARANTEE STATUS ON SUKUK RATING IN INDONESIA STOCK EXCHANGE 155 Published by AFEBI Islamic Finance and Economic Review This is an open access article under the CC BY SA license (https://creativecommons.org/licenses/by/4.0/) Table 6. G Statistical Test Results Model Fitting Information Model -2 Log Likelihood Chi-Square Df Sig. Intercept Only 78,774 Final 33,478 45,296 2 ,000 Source: Processed Data (2021) Based on the results in Table 6 obtained statistical value G of 45,296 and value of -2 log likelihood model intercept only (without predictor variable) of 78,774 and value of 2 log likelihood of final model (with predictor variable) of 33,478. Since the statistical value G = 45,296 > X2((0,05,2))= 5,991 and the significance value obtained is 0.000 smaller than 0.05 so it can be said that the coefficient of β significant value affects the ordinal logistics regression model. This indicates that there is at least one variable that has a significant effect on its bound variable or that there is one β≠0. In other words, in this study, it means that sukuk structure variables (X1) and sukuk guarantee status variables (X2) as independent variables or free variables affect simultaneously or together against sukuk rating variables as dependent variables or bound variables. c. Wald Test Partial tests are used to determine whether or not there is a significant influence on each free (independent) variable on a dependent variable. In the partial test stage, Wald statistical test was used with a level of research significance of 0.05. Table 7. Wald Statistical Test Results Parameter Estimate Estimate Std. Error Wald d f Sig. 95% Confidence Interval Lower Bound Upper Bound Threshold [Sukuk_Rating = 1] -,694 ,651 1,139 1 ,286 -1,969 ,581 [Sukuk_Rating = 2] 3,003 ,941 10,192 1 ,001 1,160 4,847 Location [Sukuk_Structure=1] -3,710 ,833 19,837 1 ,000 -5,342 -2,077 [Sukuk_Structure =2] 0a . . 0 . . . [Sukuk_Status=1] 4,864 1,046 21,612 1 ,000 2,813 6,915 [Sukuk_Status=2] 0a . . 0 . . . Source: Processed Data (2021) Based on the results in Table 7 obtained the following results: For the variable Sukuk Structure (X1) obtained a statistical value of wald test of 19,837 and a significance value of 0.000. Because the statistical value of the wald test is greater than the chi squared table value (Z2>X2((0,05,1)) = 19,837 > 3.84) and the significance value obtained is 0.000 smaller than 0.05 so it can be said that the Sukuk Structure variable (X1) has a significant effect on the Sukuk Rating (Y). For the variable Sukuk Guarantee Status (X2) obtained a statistical value of wald test of 21,612 and a significance value of 0.000. Because the statistical value of the wald test is greater than the chi squared table value (Z2>X2((0,05,1)) = 21,612 > 3.84) and the significance obtained is 0.000 less than 0.05 so it can be said that the Sukuk Guarantee Status variable (X2) has a significant effect on the Sukuk Rating (Y). Based on statistical tests wald obtained the results that the structure of sukuk (X1) and the guarantee status of sukuk (X2) had a significant effect on sukuk rating. This results in the calculation of odds ratio values that are only used for significant free (independent) variables on the model. Here are the results obtained: https://creativecommons.org/licenses/by/4.0/ AFEBI Islamic Finance and Economic Review (AIFER) Volume 6, No 2 (2021) 156 Published by AFEBI Islamic Finance and Economic Review This is an open access article under the CC BY SA license (https://creativecommons.org/licenses/by/4.0/) Table 8. Result of odd ratio value Variable Odds Ratio Value Sukuk Structure (X1) 0,0245 Sukuk Guarantee Status (X2) 129,541 Source: Processed Data (2021) Based on the results in Table 8 obtained odds ratio value for each variable as follows: The odds ratio for sukuk structure variable (X1) is exp (-3,710) = 0.0245, meaning that the chances of sukuk mudharabah structure fall into the category of less investment- worthy, investment-worthy, and very viable investment is 0.0245 times lower than sukuk structure by considering other variables constant. Because the value of the coefficient of negative value means that the higher the percentage of sukuk structure whether it is sukuk mudharabah or sukuk ijarah, the lower the chances of the sukuk being included in the category of less viable investment, worthy of investment, and very worthy of investment. The odds ratio for sukuk guarantee status variable (X2) of exp (4,864) = 129,541 means that sukuk guaranteed guarantee status opportunities fall into the category of less investment, investment-worthy, and very viable investment lower 129,541 times that of sukuk guarantee status is not guaranteed by considering other variables constant. Because the value of the coefficient of positive value means that the higher the percentage of sukuk guarantee status whether it is unsecured status or guaranteed status, the higher the chances of sukuk guarantee status fall into the category of less viable investment, worth investing, and very worthy of investment. d. Pseudo R-Square Test An R-square pseudo-test is a test that indicates a free (independent) variable capable of describing variations of dependent variables. The magnitude of the coefficient of determination in the logistic regression model is indicated by the values of Mc fadden, Cox and Snell, and Nagelkerke. Here are the results: Table 9. Pseudo R-Square Test Result Pseudo R-Square Cox and Snell ,502 Nagelkerke ,596 McFadden ,378 Source: Processed Data (2021) Based on the results in Table 9 obtained the value of mc fadden coefficient of determination of 0.378, Cox and Snell of 0.502 and Nagelkerke of 0.596. Of the three values of the coefficient of determination, nagelkerke has the largest coefficient of determination of 0.596 which means free variable (independent) namely Sukuk Structure (X1) and Sukuk Guarantee Status (X2) is able to explain the variation of sukuk rating by 59.6% while the remaining 40.4% is influenced by other factors that are not included in the scope of this study. e. Parallel Lines Test In this test it is used to test the assumption that each category has the same parameters or the relationship between logit free variables is the same for all logit equations (slope values). Here are the results: https://creativecommons.org/licenses/by/4.0/ THE EFFECT OF SUKUK STRUCTURE AND SUKUK GUARANTEE STATUS ON SUKUK RATING IN INDONESIA STOCK EXCHANGE 157 Published by AFEBI Islamic Finance and Economic Review This is an open access article under the CC BY SA license (https://creativecommons.org/licenses/by/4.0/) Table 10. Paralell Lines Test Result Test of Parallel Linesa Model -2 Log Likelihood Chi-Square Df Sig. Null Hypothesis 2,548 General ,000b 3,478 2 ,089 Source: Processed Data (2021) Based on the results in Table 10 shows that the value of Chi-Square is 3,478 and the sig value is 0.089. Because the sig value obtained is greater than 0.05 which means that the slope coefficient is the same for all response variables. 4.4 Effect of Sukuk Structure on Sukuk Rating Based on the results of the data on the partial test using statistical tests wald obtained statistical value wald test greater than the value of the chi-square table and the value of significance is smaller than the value of the level of significance of the study. The results showed that variable sukuk structures had a significant influence on sukuk ratings. This means that both mudharabah and ijarah structures can provide information to predict sukuk ratings as well as be able to explain variations in influencing sukuk rating variables. However, for the calculation of odds ratio value, sukuk structure variable has a negatively marked coefficient value which means that sukuk structure negatively affects sukuk rank. Thus the first hypothesis (H1) is rejected or in other words the sukuk structure has no positive influence on the sukuk rating. When associated with signal theory according to Bringham and Houston (2016:488), sukuk structures that have a significant negative effect on sukuk ratings that are the result of this study, can be a signal or information for information users in this case investors and companies to make decisions in the future. Sukuk rating influenced by sukuk structure can also reduce assymetric information that can occur between the company and investors and can help anticipate default risk in sukuk investment. The results of this study further confirm that sukuk structure has a negative relationship to sukuk rating which means that if sukuk ijarah structure or mudharabah sukuk structure has a higher percentage, it makes sukuk ijarah or sukuk mudharabah rank have a greater chance of decreasing or lower. In this study, sukuk ijarah had a higher percentage, so sukuk ijarah rank had a greater chance of decreasing or lower. When associated with previous theories and studies in the decline of hypotheses, the results of this study are not in line. The different sukuk structures used in sukuk publishing offer different advantages and risks. Sukuk ijarah structure has more fans because the margin / fee offered is certain by providing fixed return while for sukuk mudharabah structure fewer fans because of the profit sharing that gives expected return that is floating (Scientific, 2017). The results of Abulgasem et.al (2015), Borhan and Ahmad (2018), Puspita Sari (2020) further revealed that the structure of sukuk ijarah has a positive influence on sukuk ratings. Sukuk ijarah has a positive influence on the issuance of sukuk by the company and reflects positive signals regarding the company's financial position for investors. This makes the chances of sukuk ijarah get a bigger sukuk rating increase compared to sukuk mudharabah. The cause is not in line with the results of research and theories that apply because the motivational factors of each company that publishes sukuk vary. According to Rachmawati (2017), the selection of sukuk structure depends on the condition of the company as well as the purpose of using sukuk funds. Sukuk ijarah structure that promises a fixed fee / margin or sukuk mudharabah structure that promises floating profit sharing can not be said directly can guarantee the timeliness of payment of corporate obligations https://creativecommons.org/licenses/by/4.0/ AFEBI Islamic Finance and Economic Review (AIFER) Volume 6, No 2 (2021) 158 Published by AFEBI Islamic Finance and Economic Review This is an open access article under the CC BY SA license (https://creativecommons.org/licenses/by/4.0/) as sukuk issuer to investors. This provides an opportunity to decrease the rating given by PT Pefindo (Pefindo, 2019). The results of this study are in line with the results of research by Fitrianingsih (2017), Lestari (2018), and Tyas (2019) which stated that sukuk structure does not have a positive influence on sukuk rating. However, the results of this study are not in line with research conducted by Puspita Sari (2020), Abulgasem et al. (2015), Borhan and Ahmad (2018), and Muliana (2018) which states that sukuk structure variables have a positive influence on sukuk ratings. 4.5 Effect of Sukuk Guarantee Status on Sukuk Rating Based on the results of the data on the partial test using statistical tests wald obtained statistical value wald test greater than the value of the chi-square table and the value of significance is smaller than the value of the level of significance of the study. The results show that variable sukuk guarantee status has a significant influence on sukuk rating. This means that both sukuk guarantee status is not guaranteed and guaranteed to provide information used to predict sukuk ratings as well as being able to explain variations in influencing sukuk rating variables. Furthermore, the variable odds ratio value of sukuk guarantee status has a positively marked coefficient value. Thus the second hypothesis (H2) is accepted or in other words the status of sukuk guarantee has a positive influence on sukuk rating. When associated with signal theory according to Bringham and Houston (2016:488), sukuk guarantee status that has a significant positive effect on sukuk rating which is the result of this study, can be a signal or information for information users in this case investors and companies to make decisions in the future. Sukuk rating influenced by sukuk guarantee status can also reduce assymetric information that can occur between the company and investors and can help anticipate the risk of default in sukuk investment. The results of this study confirm that sukuk guarantee status has a positive relationship to sukuk rating which means that if sukuk guarantee status is not guaranteed or guaranteed to have a higher percentage, it makes sukuk rating with sukuk guarantee status is not guaranteed or guaranteed to have a greater chance to increase or have a high rating. In this study, the percentage of sukuk guarantee status is not guaranteed higher, so sukuk rank with sukuk guarantee status is not guaranteed to have a greater chance of increasing or higher. When associated with previous theories and studies in the decline of hypotheses, the results of this study are in line. Sukuk guarantee status is additional information from the existence of guaranteed or unsecured underlying assets can give signals to companies and investors in looking at sukuk ratings given by rating agencies. Financial Services Authority Regulation No. 18/POJK.04/2015 concerning Issuance and Sukuk Requirements in article 12 (3) letter b explains that issuers are obliged to disclose additional information about the status of assets that are used as the basis for sukuk issuance. However, it can be known that from the results of the research conducted, sukuk ratings with guaranteed status are not guaranteed to have a greater chance of increasing. This can be attributed to the application of signal theory according to Khairudin and Windita (2017) that the given signal can have a different interpretation of the receiving party information. According to Werastuti (2015) in sukuk transactions, investors prefer sukuk given guarantees because they feel safer if the investment is guaranteed. This signals to investors that the risk will be lower if there is a guarantee status of the existence of underlying assets. However, in its application according to Pranata (2014), in Indonesia the majority of sukuk are issued using the type of sukuk-based assets i.e. assets are only https://creativecommons.org/licenses/by/4.0/ THE EFFECT OF SUKUK STRUCTURE AND SUKUK GUARANTEE STATUS ON SUKUK RATING IN INDONESIA STOCK EXCHANGE 159 Published by AFEBI Islamic Finance and Economic Review This is an open access article under the CC BY SA license (https://creativecommons.org/licenses/by/4.0/) used as underlying assets but not guaranteed. This can be the reason for the opportunity to increase sukuk rating with sukuk guarantee status is not guaranteed. Another reason is that many companies do not guarantee their underlying assets because they rely on good reputation and goodwill, so that investors can get a positive signal about it and trust that sukuk investments are safe and the company can meet its obligations. This makes the sukuk rating issued by PT Pefindo for sukuk with guaranteed status is not guaranteed to have a great opportunity to increase or high. The results of this study are in line with the results of research by Puspita Sari (2020), Aulya (2019), and Borhan and Ahmad (2018) which stated that sukuk guarantee status has a positive influence on sukuk rating. However, this study is not in line with purwaningsih (2013) and Rahayuningsih (2016) research which states that sukuk guarantee status does not have a positive influence on sukuk rating. 4.6 Effect of Sukuk Structure and Sukuk Guarantee Status on Sukuk Rating Based on the results of the data on simultaneous tests using statistical tests G obtained a statistical value of test G greater than the value of the chi-square table and a significance value smaller than the value of the level of significance of the study. The results show that sukuk structure variables (X1) and sukuk guarantee status variables (X2) as independent variables or free variables affect simultaneously or together sukuk rating variables as dependent variables or bound variables. Thus the third hypothesis (H3) is accepted or in other words the sukuk structure and sukuk guarantee status have an influence on sukuk rating. When associated with signal theory according to Bringham and Houston (2016:488), sukuk structure and sukuk guarantee status can be a signal or information for information users in this case investors and companies to make future decisions regarding sukuk investments. Sukuk rating influenced by sukuk structure (X1) which is projected with the type of contract that will affect the form of sukuk return where sukuk ijarah promises fixed fee /margin and sukuk mudharabah promises floating profit sharing and sukuk guarantee status (X2) which is projected with additional information related to underlying assets guaranteed or not guaranteed can reduce assymetric information that can occur between the company and investors and can help anticipate the default risk in sukuk investment. In this study, sukuk ijarah structure with sukuk guarantee status is guaranteed to have a greater chance of getting a lower sukuk rating than sukuk mudharabah structure with sukuk guarantee status not guaranteed by PT Pefindo. 5. CONCLUSION The results of this study show that partially, sukuk structure has the opportunity to lower sukuk rating, while sukuk guarantee status has an opportunity to increase sukuk rating. It was then simultaneously proven that sukuk structure and sukuk guarantee status had an effect on sukuk rating. Future research could include other variables that are expected to affect sukuk ratings. This is based on Pseudo R-Square test results which stated that there were still 40.4% of other factors or variables not included in the study. Further research can also add other rating agencies in assessing sukuk ratings and add the observation time period. References Abulgasem, M. A. E., Nurul A. M, dan Nathasa M. R. (2015). The Influence of Corporate Governance, Financial ratios, and Sukuk Structure on Sukuk Ratings. Procedia Economics and Finance. 31: 62-74 https://creativecommons.org/licenses/by/4.0/ AFEBI Islamic Finance and Economic Review (AIFER) Volume 6, No 2 (2021) 160 Published by AFEBI Islamic Finance and Economic Review This is an open access article under the CC BY SA license (https://creativecommons.org/licenses/by/4.0/) Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). (2017). Shari’ah Standards & Shari’ah Governance (SS & SG) First Edition. Kingdom of Bahrain: AAOIFI. Al Haraqi dan Endang S.N. (2017). Pengaruh Return On Asset, Secure dan Maturity terhadap RatingSukuk. Jurnal Ilmiah. 2 (4): 116 124 Aulya, Meyta Siti. (2019). Pengaruh Ukuran Perusahaan, Pertumbuhan Perusahaan, Tata Kelola Perusahaan, Secure Dan Maturity Terhadap Peringkat Sukuk. Skripsi Mahasiswa Fakultas Ekonomi dan Bisnis Universitas Islam Negeri Syarif Hidayatullah. Jakarta. Azis, Musdalifah, Sri Mintarti dan Maryam. (2015). Manajemen Investasi Fundamental, Teknikal, Perilaku Investor dan Return Saham. Yogyakarta: CV Budi Utama. Borhan, N., dan Ahmad, N. (2018). Identifying the Determinants of Malaysian Corporate Sukuk Rating. International Journal of Islamic and Middle Eastern Finance and Management. 11(3): 432-448 Brigham dan Houston. (2016). Fundamentals of Financial Management. United States:Cengage Learning. Direktorat Pembiayaan Syariah. (2015). Mengenal Sukuk Investasi Berbasis Syariah. Jakarta: Direktorat Jenderal Pembiayaan Utang. Fatwa DSN-MUI. (2001). Fatwa Dewan Syariah Nasional Majelis Ulama Indonesia. Nomor 32/DSN- MUI/IX/2002 Tentang Obligasi Syariah. Fitrianingsih, Arum. (2017). Pengaruh Corporate Governance, Struktur Sukuk Dan Cost Of Debt Terhadap Peringkat Sukuk (Studi Kasus pada Perusahaan Penerbit Sukuk di Daftar Efek Syariah Periode 2012- 2015. Skripsi Mahasiswa Fakultas Ekonomi dan Bisnis Islam Institut Agama Islam Negeri Surakarta. Surakarta Hadinata, Sofyan. (2020). Determinan Peringkat Sukuk: Ditinjau dari Aspek Akuntansi dan Non-Akuntansi. Wahana Riset Akuntansi. 8 (2): 95-107. Hidayat, Taufik. (2011). Buku Pintar Investasi Syariah. Jakarta: Mediakita. Ilmiah, Dunyati. (2017). Perbandingan Tingkat Yield To Maturity (YTM) Dan Peringkat Sukuk Pada Sukuk Ijarah Dan Sukuk Mudharabah Yang Terdaftar Di Bursa Efek Indonesia Periode 2011-2016. Tesis Mahasiswa Fakultas Syari’ah dan Hukum UIN Sunan Kalijaga. Yogyakarta Innasativa, Anggita. (2018). Perbandingan Risk dan Return Antara Sukuk Dengan Obligasi yang Terdaftar Pada Bursa Efek Indonesia (BEI) Periode 2010-2016. Skripsi Mahasiswa Fakultas Ekonomi dan Bisnis Universitas Islam Indonesia. Yogyakarta. Junaidi. (2015). Memahami Skala-Skala Pengukuran. Jurnal Fakultas Ekonomi dan Bisnis Universitas Jambi. 1(1): 1-4. Kemenkeu. (2015). Penggunaan Akad Ijarah dalam Sukuk Negara. Jakarta: Kemenkeu. Khairudin dan Windita. (2017). Analisis Pengaruh Rasio Profitabilitas, Debt to Equity Ratio (DER) dan Price to Book Value (PBV) Terhadap Harga Saham Perusahaan Pertambangan di Indonesia. Jurnal Akuntansi & Keuangan. 8 (1): 1-24. Lestari, Bibit Intan. (2018). Analisis Pengaruh Kinerja Keuangan, Ukuran Perusahaan, Dan Struktur Sukuk Terhadap Peringkat Sukuk. Skripsi Mahasiswa Fakultas Ekonomi dan Bisnis Universitas Dipenogoro. Semarang. Muliana, Ita. (2018). Pengaruh Struktur Dan Maturity Terhadap Peringkat Sukuk Pada Perusahaan Penerbit Sukuk Yang Terdaftar Di Daftar Efek Syariah. Skripsi Mahasiswa Fakultas Ekonomi Dan Bisnis Islam Universitas Islam Negeri Ar- Raniry. Banda Aceh Otoritas Jasa Keuangan. 2020. Laporan Penerbitan Sukuk. Jakarta Pusat: OJK. https://creativecommons.org/licenses/by/4.0/ THE EFFECT OF SUKUK STRUCTURE AND SUKUK GUARANTEE STATUS ON SUKUK RATING IN INDONESIA STOCK EXCHANGE 161 Published by AFEBI Islamic Finance and Economic Review This is an open access article under the CC BY SA license (https://creativecommons.org/licenses/by/4.0/) Pemeringkat Efek Indonosia (Pefindo). (2019). Sukuk Rating Methodology. (Online),(https://www. pefindo.com/fileman/file?file=833, diakses 7 Januari 2021) Pemeringkat Efek Indonosia (Pefindo). (2019). Rating Methodology. (Online), (https://www. pefindo.com/pageman/rating-methodology, diakses 12 Maret 2021) Peraturan Otoritas Jasa Keuangan No. 18/POJK.04/2015 tentang Penerbitan dan Persyaratan Sukuk. Pranata, Ahmad Adi. (2014). Analisis Kesesuaian Syariah dalam Penerbitan, Pelaksanaan, dan Events Of Default dalam Investasi Sukuk Korporasi Ijarah( Studi Kasus Pada PT X). Jurnal Mahasiswa Universitas Indonesia. 7-15. Purwaningsih, Septi. (2013). Faktor yang Mempengaruhi Rating Sukuk yang Ditinjau Dari Faktor Akuntansi dan Non-Akuntansi. Accounting Analysis Journal. 2 (3): 1-9. Puspita Sari, Afifuddin dan Mawadri. (2020). Pengaruh Struktur Sukuk, Umur Sukuk, dan Status Jaminan Sukuk terhadap Peringkat Sukuk Pada Perusahaan Yang Terdaftar Di Daftar Efek Syariah Tahun 2016-2018. E-JRA. 9 (5): 2-17. Rachmawati, Eka N. (2017). Akad Penerbitan Sukuk di Pasar Modal Indonesia dalam Perspektif Fikih. AL-A’DALAH. 14 (1): 257-258. Raharja dan M. P Sari. (2008). Kemampuan Rasio Keuangan Dalam Memprediksi Peringkat Obligasi (PT KASNIC CREDIT RATING). Jurnal MAKSI. 8(2). Rahayuningsih, Dwi. (2016). Pengaruh Secure, Maturity, Kualitas Auditor, Komite Audit, Dan Sinking Fund terhadap Rating Sukuk. Artikel Ilmiah Mahasiswa 2016. Rizaldi, Sandi. (2020). Pengaruh Penerbitan Sukuk terhadap Reaksi Pasar Saham (Event Study pada Perusahaan-Perusahaan yang Menerbitkan Sukuk di Bursa Efek Indonesia Tahun 2014-2019. Skripsi Mahasiswa Fakultas Ekonomi dan Bisnis Universitas Hasanuddin. Makassar. Sudaryanti. (2013). Analisis Determinan Peringkat Sukuk dan Peringkat Obligasi. TAZKI. .6 (3): 105-106. Tyas, Luluk Ayuning. (2019). Rasio Keuangan, Corporate Governance, Struktur Sukuk Dan Peringkat Sukuk (Studi Pada Perusahaan Penerbit Sukuk yang Terdaftar di BEI Periode 2014-2017). Skripsi Mahasiswa Fakultas Ekonomi dan Bisnis Islam Institut Agama Islam Negeri Surakarta. Surakarta. Werastuti, Desak Nyoman Sri. (2015). Analisis Prediksi Peringkat Obligasi Perusahaan Dengan Pendekatan Faktor Keuangan dan Non Keuangan. Jurnal Dinamika Akuntansi. 7(1): 63-74. Widowati, D., Nugrahanti, Y., dan Kristanto, A.B. (2013). Analisis Faktor Keuangan dan Non Keuangan yang Berpengaruh Pada Prediksi Peringkat Oblogasi di Indonesia (Studi Pada Perusahaan Non Keuangan yang Terdaftar di BEI DAN DI Daftar Peringkat PT Pefindo 2009-2011). Jurnal Manajemen. 13(1): 35-54. https://creativecommons.org/licenses/by/4.0/