Sukuk structures

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.