Sukuk Advisory Service
Expert guidance for Sukuk structuring and issuance. Feasibility studies. Shariah structuring. Documentation review. Fatwa facilitation. Investor roadshow support.
Expert Guidance for Sukuk Structuring and Issuance
Sukuk are Islamic bonds. They are one of the most important tools in Islamic finance. Governments issue Sukuk to fund infrastructure projects. Corporations issue Sukuk to raise capital for expansion. Banks issue Sukuk to manage their liquidity. But Sukuk are complex instruments. They require deep Shariah knowledge and sophisticated financial structuring expertise.
A Sukuk is not a debt instrument like a conventional bond. It is a certificate of ownership in an underlying asset. The investor owns a share of an asset, not a share of a debt. The return to the investor comes from the income generated by the asset, not from interest. This structure is Shariah compliant because it involves real assets and risk sharing.
There are many types of Sukuk. Sukuk al Ijarah are based on lease contracts. Sukuk al Musharakah are based on partnerships. Sukuk al Wakalah are based on agency arrangements. Sukuk al Salam are based on forward sale contracts. Each type has different Shariah requirements and different risk profiles.
Our Sukuk Advisory service helps you choose the right structure and execute it correctly. We guide you from feasibility study to final issuance. We work with your legal team, your investment bank, and your Shariah board. We ensure that every step is Shariah compliant. We help you document the transaction. We help you get fatwas. We help you market to investors.
Our team has structured Sukuk ranging from USD 10 million to USD 500 million across multiple jurisdictions. We know the market. We know the scholars. We know the investors. Let us help you issue your Sukuk successfully.
What's Included
Feasibility Study
We help you determine whether Sukuk is the right funding option for you. We analyze your funding needs. How much capital do you need? When do you need it? How long do you need it for? We analyze your asset base. Do you have assets that can back a Sukuk? What type of assets? Real estate? Equipment? Intellectual property? We analyze the market. Is there investor demand for Sukuk in your jurisdiction? What yield would investors expect? We analyze the costs. Legal fees. Shariah fees. Listing fees. Investor roadshow costs. We compare Sukuk to other funding options like bank loans or equity. You get a clear recommendation on whether Sukuk makes sense for you.
Shariah Structuring
Based on the feasibility study, we design the Sukuk structure. We select the appropriate Sukuk type. Ijarah for assets that can be leased. Musharakah for joint ventures. Wakalah for asset management. Salam for agricultural or commodity financing. We design the asset transfer mechanism. How will the assets be transferred to the Sukuk vehicle? We design the profit distribution mechanism. How will income from the assets flow to investors? We design the purchase undertaking. What happens at maturity? All of this is documented in a Shariah compliant structure approved by your Shariah board.
Documentation Review
Sukuk issuance requires extensive documentation. The offering memorandum describes the Sukuk to investors. The trust deed establishes the Sukuk vehicle. The purchase agreement transfers assets. The servicing agreement manages the assets. The fatwa confirms Shariah compliance. We review all documentation. We ensure that the documents accurately reflect the Shariah structure. We identify any clauses that could be interpreted as interest. We work with your legal team to make corrections. The documentation must be perfect. Investors will scrutinize it. Regulators will review it. We help you get it right.
Fatwa Issuance
Before you can issue Sukuk, you need a fatwa from your Shariah board confirming that the structure is compliant. We prepare the fatwa request. The request explains the structure, the asset transfer, the profit distribution, and the maturity arrangements. We present the request to your Shariah board. We answer their questions. We make any changes they request. We document the fatwa once it is issued. The fatwa is included in the offering memorandum. Investors will read it. They need to trust that the Sukuk is truly halal. A credible fatwa from a respected board gives them that confidence.
Investor Roadshow Support
Once the Sukuk is structured and documented, you need to sell it to investors. We help you prepare for investor roadshows. We help you develop the investor presentation. We help you prepare answers to common investor questions. What is the Sukuk structure? What are the risks? What is the expected yield? How is the yield calculated? What happens at maturity? We can also attend roadshow meetings with you. We answer the Shariah questions that investors may have. Our presence gives investors confidence that the Sukuk is authentic.
Post Issuance Compliance
After the Sukuk is issued, the work continues. You need to make periodic payments to investors. You need to service the underlying assets. You need to monitor that the assets remain Shariah compliant. You need to prepare annual compliance reports for your Shariah board. You need to communicate with investors. We provide post issuance compliance support. We help you set up reporting systems. We help you prepare Shariah compliance certificates. We help you manage any issues that arise. We are your partner for the life of the Sukuk.
How It Works
Initial Discussion
We meet with you to understand your funding needs. How much capital do you need? What is the purpose of the capital? What assets do you have available? What is your timeline? What is your budget? We provide a preliminary assessment and a fixed price quote.
Feasibility Study
We conduct a feasibility study. We analyze your funding needs, your asset base, the market conditions, and the costs. We provide a written report with a recommendation. The feasibility study takes four to six weeks.
Structure Design
Based on the feasibility study, we design the Sukuk structure. We select the Sukuk type. We design the asset transfer. We design the profit distribution. We document the structure in a Shariah paper. Structure design takes four to eight weeks.
Documentation
We work with your legal team to draft the offering documents. We review every document for Shariah compliance. We work with your Shariah board to obtain the fatwa. Documentation takes eight to twelve weeks.
Marketing
We help you prepare for investor roadshows. We help you develop the presentation. We may attend roadshows with you. Marketing takes four to eight weeks depending on investor demand.
Issuance and Post Issuance
The Sukuk is issued. We help you with the closing. We then provide ongoing compliance support. We help you with periodic reporting. We help you with annual Shariah board reviews. We are with you for the life of the Sukuk.
Frequently Asked Questions
We advise on Sukuk of all sizes. However smaller Sukuk may not be cost effective because the fixed costs of issuance such as legal fees, Shariah fees, and listing fees are significant. For a Sukuk below USD 10 million, the issuance costs may be 5 percent to 10 percent of the proceeds. That is very expensive. For a Sukuk of USD 10 million to USD 50 million, issuance costs are typically 2 percent to 4 percent. For a Sukuk above USD 50 million, issuance costs are typically 1 percent to 2 percent. If your funding need is below USD 10 million, you may be better off with a bank loan or a private placement rather than a public Sukuk. We can advise you on the most cost effective option for your situation.
The timeline depends on the complexity of the structure and the regulatory approvals required. For a simple Sukuk al Ijarah backed by existing real estate assets, with no complex regulatory approvals, structuring typically takes four to six months from initial discussion to issuance. For a complex Sukuk al Musharakah involving multiple parties and cross border assets, with regulatory approvals in multiple countries, structuring can take nine to twelve months or more. The main drivers of timeline are asset identification, Shariah board approval, legal documentation, and regulatory review. We provide a timeline estimate during the feasibility study and update it as we progress.
Yes we have experience working with regulators in Hong Kong, Malaysia, Singapore, the UAE, Saudi Arabia, the United Kingdom, and the United States. Each regulator has different requirements for Sukuk issuance. The Securities Commission of Malaysia has a comprehensive Sukuk framework. The Dubai Financial Services Authority has its own requirements. The Hong Kong Monetary Authority is developing its capacity. We understand the requirements in each jurisdiction. We work with your legal counsel to prepare the necessary filings. We help you respond to regulator questions. We have good relationships with regulators. We know what they look for.
We provide two types of certificates. First we provide a Shariah Compliance Certificate at the time of issuance. This certificate confirms that the Sukuk structure has been reviewed by our Shariah board and found to be compliant. The certificate is included in the offering memorandum. Investors rely on it. Second we provide annual Shariah Compliance Certificates after issuance. These certificates confirm that the Sukuk has been managed in compliance with Shariah principles during the year. The annual certificates are provided to your Shariah board and can be shared with investors. We do not issue the fatwa itself. The fatwa is issued by your Shariah board. We facilitate the fatwa process but we do not replace your board.
Yes but with caveats. Public Sukuk issuance is expensive and time consuming. It may not be suitable for a small or medium enterprise. However there are alternatives. Private placement Sukuk can be sold to a small group of institutional investors without a public offering. The costs are lower and the timeline is shorter. Minimum size for a private placement Sukuk may be as low as USD 5 million. Another alternative is asset backed financing using Sukuk like structures but without a public issuance. For example you could issue a series of small Sukuk to a group of investors you already know. This is sometimes called a retail Sukuk or a community Sukuk. We can help you structure these alternatives. Contact us to discuss your specific situation.
Our fee depends on the complexity of the Sukuk and the scope of our advisory. For a simple Sukuk al Ijarah with a straightforward asset base, our fee typically ranges from USD 50,000 to USD 100,000. For a complex Sukuk al Musharakah with cross border assets and multiple tranches, our fee can range from USD 150,000 to USD 300,000 or more. These fees cover our work from feasibility study through post issuance compliance. They do not cover legal fees, Shariah board fees, listing fees, or other third party costs. Those are your responsibility. We provide a fixed price quote before you engage us. You know exactly what our fee will be. There are no surprises.