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Definitions
Sukuk Using Al-Ijarah Structure

Stage 1: Contract of Cash Sale (Bay’ Mutlakah)
  • 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