Sukuk Al Istisnaa: Shariah Requirements, Case Study: Kingdom Installment Company LLC

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1. SUKUK AL-ISTISNA ’A | AAOIFI is derived from the Arabic term an as an distribution amounts to investors under the sukuk. Shari’ah Requirements Applicable to the Underlying Istisna’a structure in a Sukuk Shari’ah requirements: under the Liquidated damages provisions are also permissible and can help to ensure that the contractor delivers on time. Shari’ah delivered for leasing. Despite these apparent advantages of the hold that their opinions on advance rentals and Shari’ah structure. 28 Latham & Watkins | The Sukuk Handbook: A Guide To Structuring Sukuk
2. CASE STUDY : KINGDOM INSTALLMENT COMPANY LLC KSA MBS I INTERNATIONAL SUKUK COMPANY LIMITED ( US$18 MILLION FIXED RATE SUKUK CERTIFICATES million issue of a Shari’ah The Appointment of Servicer Issuer’s KSA Agent Custodian Reserve Account Instructions Real Estate Rights Transfer Agreement Title deeds Sukuk certificates Issuer KSA SPV RERT Upfront Sale of Assets Investors Sukuk proceeds Sale Proceeds Servicing Agreements Guarantee Originator DAAR Agent’s Fees IFC Agreements Underlying Obligors Issuance of Sukuk: Subscription to Sukuk and Creation of a Trust: The investors subscribed for the sukuk and paid the over the proceeds and acted as a trustee for the investors. Istisna’a Arrangement: to manufacture or construct certain assets and deliver them. The trustee paid the contract price in phase made up the principal amount. Latham & Watkins | The Sukuk Handbook: A Guide To Structuring Sukuk 29
3. Arrangement : Periodic Distribution to Investors: investors. Sale and Purchase Agreement of Assets: Payment of the Dissolution Amount: dissolution amount to the investors. Servicing Agreement: assets under the servicing costs. 30 Latham & Watkins | The Sukuk Handbook: A Guide To Structuring Sukuk