Islamic Bonds: Your Guide to Issuing, Structuring and Investing in Sukuk

Author biographies Acknowledgments Foreword, Khalid Abdulla Al Bassam, Deputy Governor, Bahrain Monetary Agency, Bahrain View of a Shari'a scholar, Yusuf Talal DeLorenzo, Shari'a Scholar and Director, Yasaar Ltd, London Overview of the sukuk market, Professor Rodney Wilson Institute for Middle Eastern and Islamic Studies, University of Durham, United Kingdom The contents The legitimacy of sukuk Why have Islamic bonds? Salam securities Ijarah bonds Istisna'a bonds Potential for mudaraba and musharaka bonds The Malaysian sukuk experience Bahrain's sovereign sukuks Case study: Qatar Global Sukuk Scope for sovereign sukuk in Saudi Arabia Potential for corporate sukuk Introduction Sukuk: new blood for emerging markets Structure of the book 1: Investment in Islam Introduction The Shari'a's alternative approach to financial governance The prohibition of riba Encouraging commerce Rules relating to settlement Innovations facilitating modern investing Asset and liability management Flexible instruments and alternatives Conclusion 2: Sukuk: origins and distinctiveness Introduction The Arabic meaning of sakk or sukuk Historical references to sukuk Sukuk in hadith and Islamic commercial literature Applying historical lessons to modern securities The Malaysian exception Sukuk in contrast with conventional fixed-income instruments Sukuk compared with derivatives Conclusion 3: Structuring sukuk transactions Introduction Eligible assets Issuer/vehicle selection Securitisation of Islamic mortgage alternative transactions Transfer of asset ownership to the issuer The underlying agreement Purchase and sale undertakings Means of transfer Credit enhancement Rating sukuk Conclusion 4: Sovereign sukuk: applications and implications Introduction Public-sector sukuk applications Landmark sovereign sukuk issuances Cross-border convergence Unlocking new sovereign markets Sukuk applied to risk management Project finance sukuk Revenue securitisation under build-operate-transfer sukuk Future considerations: domestic sukuk markets Conclusion 5: Sukuk applied to corporate finance and real estate Introduction The evolution of leasing sukuk Salam sukuk New opportunities in the corporate sector The contribution of conventional institutions Liquidity management for Islamic banks Contemporary Islamic risk-sharing contracts Product diversity in the real estate markets General sukuk applications for real estate Residential real estate in North America Re-engineering leveraged real estate REITs and sukuk An innovative real estate application Growing investor awareness and confidence Conclusion 6: Enabling infrastructure Introduction Creating a regulatory framework Choice of law Issuance possibilities under different legal formats US sukuk considerations Asset-backed securities opportunities Generic problems under advanced tax regimes Settlement Credit rating Selling practices Conclusion 7: Conclusion Distinct features Important steps Innovation in real estate Need for more alternatives and increased infrastructure Proactive sovereigns A demand-driven market The Islamic alternative - a paradigm shift Increasing convergence 8: Glossary of Islamic financial and related terms