Islamic Sukuk

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Islamic Sukuk Concept Applications Muhammad
Faisal Shaikh Head,Corporate Product
Development BankIslami Pakistan Ltd Ramadan 13,
1428 September 26, 2007
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Sukuk Al Ijarah
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Sukuk Al Ijarah Structure
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ABC Ltd. (Corporate)
ABC Ltd. wishes to purchase a new asset and plan
to raise finance through issuance of Islamic
Sukuk.
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Supplier

• Supplier of the Asset is identified and
  negotiations is finalized by ABC Ltd.

ABC Ltd.
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Supplier
Issuer SPV (LLC 100 owned ABC Ltd.)
ABC Ltd.
SPV is created by ABC Ltd. as a limited
liability Company.
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Supplier
Issuer SPV (LLC 100 owned ABC Ltd.)
Payment made to Supplier Title is transferred to
SPV
Sukuks
Investors
ABC Ltd.
Proceeds
SPV issues certificates and receives proceeds
which are used to purchase asset from the supplier
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SPV holds Asset as Trustee and leases the
plant to ABC Ltd. as per rules of Ijarah
Issuer SPV
SPV holds Plant/ Asset as Trustee
Investor
ABC Ltd.
SPV leases Plant to ABC Ltd. on Ijarah
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Investors
ABC Ltd. (Lessee)
Issuer SPV
Semi-annual coupon distribution amounts
Periodic Lease Rentals
ABC Ltd. (Lessee) pays periodic rentals to SPV
for tenors amounts matching the coupon tenor
of the Sukuks
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Exercises the purchase undertaking. Asset
transferred to ABC Ltd.
Investors
ABC Ltd. (Lessee)
Issuer SPV
Redeems the Trust Certificates at dissolution
Pays the exercise price at dissolution

• ABC Ltd (Lessee) give the SPV an irrevocable
  purchase undertaking to purchase the Asset at
  maturity.
• Exercise Price Initial Purchase Price of Asset
  service costs.
• Asset is transferred back on maturity, upon
  payment of the Exercise Price to the SPV / Sukuk
  Holders.

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Sukuk Al Salam
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Sukuk Al Musharakah
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Musharakah Term Finance Certificates by Sitara
Chemicals Industries Ltd
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