Periodic distribution
The scheduled payment of rent or profit to sukuk holders on set dates during the life of the sukuk.
A periodic distribution is the amount paid to sukuk holders on each scheduled payment date, derived from the rent, profit or other income of the underlying assets. The prospectus sets out how it is calculated, which may reference a benchmark in a rental or profit formula, and what happens if income falls short. Because it comes from asset income rather than a coupon on debt, the documents should trace each distribution to that income.
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
SukukCertificates of equal value representing undivided shares in the ownership of assets, usufruct, services or a project.Sukuk al-ijarahSukuk whose holders own leased assets and receive the rent paid by the lessee as their return.Purchase undertakingA unilateral promise by the originator or obligor to buy the sukuk assets from the holders at maturity or on default.