Investor Presentaiton
Sukuk in a nutshell
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Basic structure: Issuer issues Sukuk and collects proceeds from Sukuk
Investors and uses those proceeds to acquire the Islamic asset(s) on
behalf of Sukuk Investors. The Issuer then declares a trust over these
proceeds and assets.
Underlying asset: the underlying asset is another Islamic contract e.g.
ijara or mudaraba hence the reference to sukuk al-ijara etc
Basis of entitlement: The commercial exploitation of underlying assets.
generates return for Sukuk Investors. Sukukholders are entitled to receive
their share of profits generated by the asset and the proceeds of disposal
of the asset at the end of the term.
Redemption mechanisms: Typically most Sukuk are redeemed by the
eventual sale of the underlying asset to the Originator. In a default, Sukuk
Investors have the right to enforce a buy back agreement with the
originator. (Legal documentation does not typically give Sukuk Investors
powers to take over the underlying asset and dispose them).
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