Sukuk structures
Type
Practical Guidance
Document type
Practice Note
Date
19 Jan 2022
Jurisdiction
Kuwait
Taxonomy
Islamic Finance
Copyright
LexisNexis
Overview
This Practice Note sets out the key differences between conventional bonds and Sukuk, or trust certificates as they are otherwise known, (Sukuk).
The Practice Note also provides an overview of the main Sukuk structures and comments on recent trends seen in the Sukuk market.
Practical Guidance
Bonds vs Sukuk
Structural features
In order to generate returns for investors, all Sukuk structures rely upon either the performance of an underlying asset or a contractual arrangement with respect to that asset. Consequently, the Sukuk represents an investor's undivided beneficial interest in the underlying Sukuk asset(s) and a right against the issuer of the Sukuk to payment of profit (or periodic distribution) amounts and repayment of principal.