The International Islamic Financial Markets Conference

Guarantee of Capital in Sukuk Issuance

Dr. Eltegani A. Ahmed

Advisor, Minister of Finance (Sudan)
President of Higher Consultative Committee for Government Sukuk
Ministry of Finance and National Economy

Manama - Bahrain
May 2005
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Gurantee of Capital in Sukuk

Issuance
Structure of Sukuk
Investors
Money
Mudarib/Agent
(SPV)
Contracts

Money
User ( Govt)
Financee

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Pledge introduced by one party to another in a contractual relationship

based on profit / loss to pay back his principal to him.
Guarantee of capital is not allowed from shariah point of view.
Alternatives:
1) Introducing a guarantee by a third party.
2) Insurance.
3) Sukuk based on Murabaha, Istisnaa and leasing ending with ownership.
4) Buying an asset and lease it back to the seller (leasing ending with
ownership).
5) Mixing Murabaha and deposit contract (Arboon).
6) Guarantee provided by Mudhareb.

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Recommendations:
Concentrate on products based on financial engineering.
Importance of developing financial engineering products.

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 Thank You

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