Sukuk Services

PACIFIC TRUSTEES ISLAMIC 

Islamic Corporate Trust Division of Pacific Trustees Singapore

 

The emergence of Sukuk is one of the most significant developments in the Islamic Capital Markets and Islamic Debt Securities, and this niche market has been growing in recent years. Today, Pacific Trustees Islamic is conversant to act as Trustee for Islamic Debt Capital Market products, specifically on the issuance of Islamic Bonds (Sukuk), Islamic Medium-Term Notes and Islamic Commercial Papers adhering with Shariah Law as advised and approved by the Shariah Advisory Council appointed by the Securities Commission Malaysia. The following are the Shariah principles, concepts and arrangements that commonly govern the underlying Islamic transaction structure for the Sukuk Market and Islamic Debt Securities:

Bai` bithaman ajil (BBA) (Deferred-payment sale)

A contract that refers to the sale and purchase of assets on a deferred and instalment basis with pre-agreed payment period.

Tawarruq (Tripartite sale)

Purchasing a commodity on a deferred price and then selling it to a third party for cash.

Wakalah (Agency)

A contract where a party authorises another party to act on behalf of the former based on the agreed terms and conditions as long as he is alive.

Kafalah (Guarantee)

​A contract of guarantee whereby a guarantor underwrites any claim and obligation that should be fulfilled by an owner of the asset. This concept is also applicable to a guarantee provided on a debt transaction in the event a debtor fails to fulfil his debt obligation.

Hibah (Gift)

​A gift awarded to a person on a voluntary basis.

Ibra’ (Rebate)

An act by a person to withdraw his rights to collect payment from a person who has the obligation to repay the amount borrowed from him.

Musharakah  (Profit and loss sharing)

A partnership arrangement between two or more parties to finance a business venture whereby all parties contribute capital either in the form of cash or in kind for the purpose of financing the said venture. Any profit derived from the venture will be distributed based on a pre-agreed profit sharing ratio, but a loss will be shared on the basis of capital contribution.

Murabahah  (Cost-plus sale)

A contract that refers to the sale and purchase of assets whereby the cost and profit margin (mark-up) are made known.

Ijarah (Leasing)

A contract whereby a lessor (owner) leases out an asset to a lessee at an agreed lease rental for a predetermined lease period. The ownership of the leased asset shall always remain with the lessor.

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