The document discusses various Islamic finance structures that can be used as alternatives to conventional debt structures. It describes common equity-based structures like Musharakah, Murabaha, and Mudarabah. It also discusses Sukuk structures, which are Islamic bonds, with the most common being Sukuk al-Mudarabah and Sukuk al-Ijarah. The document notes there are opportunities for businesses to access liquidity in the Middle East market through these Islamic finance structures.
10. Sukuk al-Ijarah Structure Sukuk holders (Investors) Obligor as Seller Obligor leases Back assets As lessee (Issuer/Lessor) Special purpose company to hold the assets in Trust for the Sukok holders Title to assets Sukuk proceeds Sukuk proceeds Periodic rentals And capital amount distributions Periodic rentals And Capital Amount payments Lease agreement For a fixed period Of time
11. Sukuk al-Ijarah Structure – Cont’d Funds taker SPV Sukuk holders Funds taker SPV Sukuk holders Funds taker SPV Sukuk holders Day 1 Periodic Payments Maturity Asset sale agreement Ijarah (Lease) agreement Transfer of Sukuk pool Lease rentals Transfer of Sukuk pool $ $ Issue of Sukuk securities $ Lease rentals Redemption Of Sukuk $
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13. Example of a Tax Efficient Structure Investors Offshoreco Canco Real Estate Fund Head lease interests Sub-lease interests Tenants Various countries Shares Shares Advamces Offshore Country Canada Sub-lease Head lease & Call /put options On Sub. LP interest
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