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Types of Sukuk

Sukuk al Istisna (Islamic Project Bond)
Sukuk al Istisna (Islamic Project Bond)

Sukuk al istisna (Islamic project bond) Istisna is a contract between a buyer and a manufacturer in which the manufacturer agrees to complete a construction project by a future date. The contract requires a fixed price and product specifications that both parties agree to.

source: dummies.com
Sukuk al Mudaraba
Sukuk al Mudaraba

If at the outset, it is not possible to identify a specific tangible asset for investment, the sukuk al-mudaraba (or a sukuk al-musharaka) may be a viable alternative to the sukuk al-ijara structure.

Sukuk al Murabaha
Sukuk al Murabaha

This reduces the popularity of sukuk al-murabaha for potential investors and is reflected by the limited number of sukuk al-murabaha issuances in the sukuk market. An example of a sukuk al-murabaha issuance is: Arcapita Bank, US$200million issued in October 2005.

Sukuk al Musharaka (Joint Venture Sukuk)
Sukuk al Musharaka (Joint Venture Sukuk)

Prior to the AAOIFI statement in 2008 (the “AAOIFI Statement”), one of the more commonly used sukuk structures was that of sukuk al-musharaka. However, following on from the AAOIFI Statement criticising the use of purchase undertakings in sukuk al-musharaka structures (as further discussed below under the heading “AAOIFI’s Statement of 2008”), the popularity of this structure has declined in recent times.

Sukuk al-Ijara (Lease-Based Sukuk)
Sukuk al-Ijara (Lease-Based Sukuk)

Sukuk al-ijara (lease-based sukuk) The ijara contract is essentially a rental or lease contract: It establishes the right to use an asset for a fee. The basic idea of ijara sukuk is that the sukuk holders (investors) are the owners of the asset and are entitled to receive a return when that asset is leased.

source: dummies.com
Sukuk al-Salam (Deferred Delivery Purchase Sukuk)
Sukuk al-Salam (Deferred Delivery Purchase Sukuk)

Sukuk al-salam (deferred delivery purchase sukuk) In a salam contract, an asset is delivered to a buyer on a future date in exchange for full advance spot payment to the seller. Sharia allows only salam and istisna contracts to be used to support advanced payment for a good to be delivered in the future.

source: dummies.com

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