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BACKSukuk Using Al-Ijarah Structure
- SPV purchases property (e.g. hospitals) from obligator (government) (1)
- The assets purchased by the SPV is funded by the issuance of sukuk (trust certificates) which represents beneficial ownership in the assets and the lease (3)
- Government received cash proceeds (7)
Stage 2: Contract of Leasing (Ijarah)
- SPV rents property to the government for specified period (2)
- SPV collects rentals (6)
Stage 3: During the tenure
- SPV passed the rentals to investors (9) – periodic distribution/coupon
Stage 4: At maturity
- SPV sells the property to the government at an agreed price
- Government pays cash to SPV
- SPV simultaneously pay investors cash for sukuk redemption
