Islamic Sukuk / Bond
Five major differences between Sukuk/Islamic Bonds and conventional bonds:
1. The Sukuk units are backed by physical assets.
2. Maturity is linked to the underlying project.
3. The Sukuk prospectus is Shariah Compliant as certified by the Shariah Board of Scholars.
4. The underlying asset/activity is Shariah-compliant.
5. No impermissible hedging instruments used like conventional currency swaps.
Different Types of Sukuks
1. Callable Sukuk - Sukuk issuer can redeem earlier than maturity
2. Puttable Sukuk - Sukuk holders can redeem earlier than maturity
3. Vanilla Fixed Rated Sukuk - Normal fixed rated yield to maturity
4. Convertible Sukuk - Sukuk Holders have an option to convert to equity
5. Zero-Coupon Sukuk - Zero yield to maturity (MID)
S&P Global: It expects total Sukuk issuance of about $140 billion–$155 billion this year, thanks to a recovery in issuance in Malaysia, Indonesia, and the Gulf Cooperation Council (GCC) countries. This compares with a drop in issuance to $139.8 billion in 2020 from $167.3 billion a year earlier.