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Islamic Finance Structures Islamic Finance Advisory Board Junaid Mirza – junaidmirza@gmail.com May 1, 2008
Introduction ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Introduction ,[object Object],[object Object],[object Object],[object Object]
Middle Eastern Liquidity Problem ,[object Object],[object Object],[object Object]
Simple Musharakah Structure Musharaka Party A Party B Management Funds, Equipment Management Funds, Equipment
Simple Murabaha Structure Seller Financial Institution Buyer (2) Sale of tangible property to financial Institution for a spot payment at the time of sale (3) Sale by financial institution to buyer with a mark-up and deferred or installment payments ,[object Object]
Simple Mudarabah Structure Mudarabah (Joint Venture) Rabb al-Maal (Investor) Mudarib (Manager) Project Management Funds
Islamic Bonds: Sukuk ,[object Object],[object Object],[object Object]
Sukuk al-Mudarabah SPV (Mudarib) Sukuk Subscribers (Rabb al-maal) ,[object Object],[object Object],[object Object],Project owner Project ,[object Object]
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
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 $
Raising Capital in the Middle East ,[object Object],[object Object]
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
[object Object],[object Object],[object Object],[object Object]

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Islamic Finance Structures

  • 1. Islamic Finance Structures Islamic Finance Advisory Board Junaid Mirza – junaidmirza@gmail.com May 1, 2008
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  • 5. Simple Musharakah Structure Musharaka Party A Party B Management Funds, Equipment Management Funds, Equipment
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  • 7. Simple Mudarabah Structure Mudarabah (Joint Venture) Rabb al-Maal (Investor) Mudarib (Manager) Project Management Funds
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  • 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
  • 14.