Sipchem’s recent Mudaraba Sukuk is notable as an economic success and also for its structure. The financing represented a great addition to the tool kit available to corporate treasurers in Saudi Arabia.
A Sukuk financing typically requires that:
- An issuer has unencumbered tangible assets available;
- The assets are Shari’ah compliant (i.e not related to alcohol, pork, gambling etc.);
- Direct/indirect ownership of those assets vest with the seller/issuer; and
- The estimated value of the assets is greater than or equal to