Practical Law Glossary Item 5-500-7353 (Approx. 3 pages)
Glossary
Sukuk al-ijara
A form of sukuk derived from the ijara lease financing structure. In a sukuk al-ijara transaction, the:
Entity seeking capital (originator) sells assets to a special purpose vehicle (SPV).
SPV finances the purchase of these assets with the proceeds of a sukuk issuance.
SPV holds the assets in trust for the sukuk holders who each own a proportionate interest in the assets in accordance with the value of their investment.
SPV then leases the purchased assets to the originator or an affiliate of the originator.
SPV uses the lease payments to make payments to the sukuk holders.