Programme Introduction

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Programme Introduction

In this module, we will have a quick recap of the final structure for a Sukuk Al-Ijara that we had designed and completed in another programme. We will be comparing this structure to another market issue that we have touched upon previously, and discuss their differences. Finally, we are going to look at the key features that we expect to be present in the structure based on what we have studied and analysed.

Programme Introduction

Duration 04m 35s

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Last Update 21 Dec 2021

In this module, we will have a quick recap of the final structure for a Sukuk Al-Ijara that we had designed and completed in another programme. We will be comparing this structure to another market issue that we have touched upon previously, and discuss their differences. Finally, we are going to look at the key features that we expect to be present in the structure based on what we have studied and analysed.

Sukuk

Code: PG89719

SECTION 1

Programme Introduction 04m 35s

Overview Preview Key Features and Issues to Look at Looking at the Technical Aspects of the Structure

SECTION 2

Commercial Terms and Legal Notice of the Offering Circular 03m 35s

Functions of Important Legal Terms in the Offering Circular Schedule Dissolution of the Sukuk - Maturity Date

SECTION 3

Overview of the Structure Diagram 06m 51s

Structure Diagram and Description of the principal cash flows First Step: Head Lease transferred to the Issuer Second Step: Sublease Third Step: Purchase Undertaking Transfer of a Head Lease and Leaseback Asset

SECTION 4

Sukuk Assets 04m 26s

Substitution of Premises during the life of the Sukuk Defined terms of the Head Lease Terms of the Sublease

SECTION 5

Role of the Special Purpose Vehicle 06m 37s

Link of the Trustee to the Investors Role of the Trustee - Accounts on Investors' Behalf

SECTION 6

The Role of an Obligor on a Sukuk Transaction 11m 04s

How does an Obligor Retain Control of Assets / Substitutions? What is the Nature and Functions of an Obligor? Credit Risk at Redemption Functions of Dissolution and Distribution Amounts Achieving the Sale of Asset after Dissolution Exercise Price on the Initial Sale of Asset

SECTION 7

Key Issues and Credit Risk Process at Redemption 11m 04s

Process of Credit Risk on an Asset Sale Accrued / Unpaid Structure Dissolution occurring before the next Profit Payment Date What are the Aspects of a Procurement Undertaking? Summary and Conclusion

SECTION 8

Aspects of Supplementary Rent and Sublease 06m 39s

References to Supplementary Rent and Sublease Servicing Agency Agreement Delegating Responsibility through the Servicing Agency Agreement Three Elements of the Exercise Price

SECTION 9

Calculation of Asset Price at Maturity 08m 37s

Elements of the Asset Price at Maturity Obligations of the Obligor in its Capacity as Tenant Mechanism of the Transaction Surrender Undertaking and its Expected role Scheduled Dissolution Date or the Planned Maturity Date

SECTION 10

Trustee Options on Purchase Undertakings 08m 44s

Standard Terms relating Mechanisms to Undertakings Exercise Notice Agreement Purchase Undertaking and Exercise Notice Outcomes The Role of an Exercise Agent Credit Risk / Procurement Undertaking Outcome

SECTION 11

Profit Payments and Profit Reserve Accounts in a Sukuk Transaction 11m 41s

How to Compute Sukuk Periodic Distribution Definition of Profit Reserve Account A Case of Insufficient Profits Mechanism of Exercise Price What happens to Excess Profits? Applications of Proceeds from Trust Assets Relationship of Incentive Fees and Profit Role of the Trustee - Her Majesty's Treasury (HMT)

SECTION 12

The Effects of Shariah Compliance on a Sukuk Transaction 10m 39s

Aspects of Shariah Compliance in Sukuk Parties Involved in a Sukuk / Bond Transaction Nature of the Obligor Nature of Islamic Investors Nature of Advising Banks Managing Shariah Compliance Issues

SECTION 13

Programme Summary 04m 29s

Key Elements of the Structure Diagram on Ijara Sukuk Use of the Profit Reserve Account Mitigating Risk in a Sukuk Transaction How is the Exercise Price calculated? Shariah Compliance / Board

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SECTION 1

Programme Introduction 04m 35s

Overview Preview Key Features and Issues to Look at Looking at the Technical Aspects of the Structure

SECTION 2

Commercial Terms and Legal Notice of the Offering Circular 03m 35s

Functions of Important Legal Terms in the Offering Circular Schedule Dissolution of the Sukuk - Maturity Date

SECTION 3

Overview of the Structure Diagram 06m 51s

Structure Diagram and Description of the principal cash flows First Step: Head Lease transferred to the Issuer Second Step: Sublease Third Step: Purchase Undertaking Transfer of a Head Lease and Leaseback Asset

SECTION 4

Sukuk Assets 04m 26s

Substitution of Premises during the life of the Sukuk Defined terms of the Head Lease Terms of the Sublease

SECTION 5

Role of the Special Purpose Vehicle 06m 37s

Link of the Trustee to the Investors Role of the Trustee - Accounts on Investors' Behalf

SECTION 6

The Role of an Obligor on a Sukuk Transaction 11m 04s

How does an Obligor Retain Control of Assets / Substitutions? What is the Nature and Functions of an Obligor? Credit Risk at Redemption Functions of Dissolution and Distribution Amounts Achieving the Sale of Asset after Dissolution Exercise Price on the Initial Sale of Asset

SECTION 7

Key Issues and Credit Risk Process at Redemption 11m 04s

Process of Credit Risk on an Asset Sale Accrued / Unpaid Structure Dissolution occurring before the next Profit Payment Date What are the Aspects of a Procurement Undertaking? Summary and Conclusion

SECTION 8

Aspects of Supplementary Rent and Sublease 06m 39s

References to Supplementary Rent and Sublease Servicing Agency Agreement Delegating Responsibility through the Servicing Agency Agreement Three Elements of the Exercise Price

SECTION 9

Calculation of Asset Price at Maturity 08m 37s

Elements of the Asset Price at Maturity Obligations of the Obligor in its Capacity as Tenant Mechanism of the Transaction Surrender Undertaking and its Expected role Scheduled Dissolution Date or the Planned Maturity Date

SECTION 10

Trustee Options on Purchase Undertakings 08m 44s

Standard Terms relating Mechanisms to Undertakings Exercise Notice Agreement Purchase Undertaking and Exercise Notice Outcomes The Role of an Exercise Agent Credit Risk / Procurement Undertaking Outcome

SECTION 11

Profit Payments and Profit Reserve Accounts in a Sukuk Transaction 11m 41s

How to Compute Sukuk Periodic Distribution Definition of Profit Reserve Account A Case of Insufficient Profits Mechanism of Exercise Price What happens to Excess Profits? Applications of Proceeds from Trust Assets Relationship of Incentive Fees and Profit Role of the Trustee - Her Majesty's Treasury (HMT)

SECTION 12

The Effects of Shariah Compliance on a Sukuk Transaction 10m 39s

Aspects of Shariah Compliance in Sukuk Parties Involved in a Sukuk / Bond Transaction Nature of the Obligor Nature of Islamic Investors Nature of Advising Banks Managing Shariah Compliance Issues

SECTION 13

Programme Summary 04m 29s

Key Elements of the Structure Diagram on Ijara Sukuk Use of the Profit Reserve Account Mitigating Risk in a Sukuk Transaction How is the Exercise Price calculated? Shariah Compliance / Board

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