How is a sukuk different from a bond?
A bondholder owns a debt and receives interest. A sukuk holder owns a share of an asset or a venture and receives the income it produces.
- What you own - a claim on a borrower, versus a beneficial interest in identified assets
- Where the return comes from - a fixed interest rate, versus rent, profit or a sale mark-up generated by the asset
- What happens on default - a creditor claim, versus recourse that depends on whether the sukuk is asset-backed or merely asset-based
Asset-based sukuk, where investors have no true recourse to the underlying asset, are economically closer to a bond and are treated differently by different boards. The structure is disclosed in the offer document - it is worth reading.
Factual and educational information only. Nothing on this page is financial product advice, a recommendation, or a Shariah ruling. Consider your circumstances and the product's disclosure documents, and seek licensed advice and qualified scholarly guidance before acting.