---
title: "What is Asset-backed and asset-based sukuk? | IslamicOpenFinance™"
description: "The distinction between sukuk whose holders have real recourse to the assets and those relying mainly on the obligor's promise to pay."
url: https://islamicopenfinance.com/glossary/asset-backed-sukuk/
lang: en-GB
source: "IslamicOpenFinance"
---

[Glossary](https://islamicopenfinance.com/glossary/) / [Sukuk and capital markets](https://islamicopenfinance.com/glossary/#sukuk)

Sukuk and capital markets

# Asset-backed and asset-based sukuk

The distinction between sukuk whose holders have real recourse to the assets and those relying mainly on the obligor's promise to pay.

Sukuk are described as asset-backed when holders have genuine ownership of, and recourse to, the underlying assets, and as asset-based when ownership is largely beneficial and holders rely mainly on the obligor's credit and purchase undertaking. The distinction is not a Shariah category in itself, but it matters for risk, rating and legal enforceability. Rating agencies and regulators look at the legal transfer of the assets to decide which description applies.

This entry explains a term; it is not a Shariah ruling. Approving a product is for each institution's own Shariah board and regulator.

## Related terms

[**Sukuk** Certificates of equal value representing undivided shares in the ownership of assets, usufruct, services or a project.](https://islamicopenfinance.com/glossary/sukuk/) [**Purchase undertaking** A unilateral promise by the originator or obligor to buy the sukuk assets from the holders at maturity or on default.](https://islamicopenfinance.com/glossary/purchase-undertaking/) [**Sukuk al-ijarah** Sukuk whose holders own leased assets and receive the rent paid by the lessee as their return.](https://islamicopenfinance.com/glossary/sukuk-al-ijarah/) [**Sukuk al-wakalah** Sukuk whose proceeds the obligor invests as agent in a portfolio of eligible assets, for an agreed fee.](https://islamicopenfinance.com/glossary/sukuk-al-wakalah/)

**Sukuk and capital markets**

1. [Sukuk](https://islamicopenfinance.com/glossary/sukuk/)
2. [Sukuk al-ijarah](https://islamicopenfinance.com/glossary/sukuk-al-ijarah/)
3. [Sukuk al-musharakah](https://islamicopenfinance.com/glossary/sukuk-al-musharakah/)
4. [Sukuk al-mudarabah](https://islamicopenfinance.com/glossary/sukuk-al-mudarabah/)
5. [Sukuk al-wakalah](https://islamicopenfinance.com/glossary/sukuk-al-wakalah/)
6. [Periodic distribution](https://islamicopenfinance.com/glossary/periodic-distribution/)
7. [Islamic collective investment scheme](https://islamicopenfinance.com/glossary/islamic-collective-investment-scheme/)
8. [Shariah screening](https://islamicopenfinance.com/glossary/shariah-screening/)

[All 221 terms](https://islamicopenfinance.com/glossary/)