Certificate holders can take default worries off their shoulders with proper asset-backed Sukuk
Certificate holders can take default worries off their shoulders with proper asset-backed Sukuk
Abstract of the Cover Story for Business Islamica Magazine —
The research explains how lawyers can structure Sukuk that can save certificate-holders from the repercussions of what comes after default.
Asset protection of certificate-holders vis-a-vis their creditors can be achieved by adopting bankruptcy remoteness.
By Mohammed Khnifer
When Sukuk Default:
Certificate holders can take default worries off their shoulders with proper asset-backed Sukuk
The research paper can be read at
http://www.islamica-me.com/article.asp?cntnt=570
or
http://reading.academia.edu/MohammedKhnifer/Papers
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I wrote this paper almost 8 months ago when I was pursing my MSc in UK and before we *officially* hear a serious & genuine endorsement toward the asset-backed Sukuk by Islamic finance industry body IIFM
The same research paper appeared 6 months ago as a cover for the UK-based magazine: Islamic Banking & Finance.
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Asset-backed sukuk framework seen lifting demand
Jan 10, 2011 at 15:25
Investor worries over the impact of defaults in Islamic bonds is driving a push for a better
DUBAI – Reuters–Investor worries over the impact of defaults in Islamic bonds is driving a push for a better structure for asset-backed instruments that should help alleviate concerns, bankers and lawyers said.
Islamic finance industry body IIFM is looking to develop a template in 12 to 18 months that will help reduce some of the legal and operational complexities surrounding asset-backed Islamic bonds, or sukuk, said its chief executive Ijlal Alvi.
Asset-backed sukuk are seen closer to the spirit of Islamic law as they involve a transfer of tangible assets — investors become the legal owners of these in the case of default.
Investors were taken aback as they realised the majority of sukuk were asset-based and that these could not be accessed directly by sukuk holders following a default.