The issuance of Islamic, or sukuk, bonds is expected to drop for a second consecutive year in 2009 because of the global credit crisis, dashing the hopes of the Islamic finance industry that problems in the western banking systems might benefit its products.

The sukuk market had been affected by the rising cost of borrowing, lack of investor interest in debt instruments and disputes over the compliance of some sukuk bonds with Islamic, or sharia, law, said Moody’s, the ratings agency.