Sukuk al-ijarah
Sukuk whose holders own leased assets and receive the rent paid by the lessee as their return.
Sukuk al-ijarah represent ownership of assets that are leased, with the rent forming the return paid to holders. Typically the originator sells assets to a special purpose vehicle, which issues the sukuk and leases the assets back, and a purchase undertaking allows the assets to be sold back at maturity. IIFM publishes standard templates for sukuk al-ijarah, including the prospectus, lease agreement, service agency agreement and purchase undertaking.
Sources
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.IjarahA lease: the lessor owns the asset and sells its use for an agreed rent over an agreed period.Purchase undertakingA unilateral promise by the originator or obligor to buy the sukuk assets from the holders at maturity or on default.Periodic distributionThe scheduled payment of rent or profit to sukuk holders on set dates during the life of the sukuk.