FROM “ASSET-BACKED” TO “ASSET-LIGHT” STRUCTURES: THE INTRICATE HISTORY OF SUKUK

This paper traces the development of the sukuk market through sukuk case studies. It discusses how sukuk has evolved from an asset-backed structure, where sukuk holders have ownership rights over the underlying asset, to an asset-based structure, where sukuk holders rank pari passu with unsecured creditors. This paper subsequently highlights the emergence of the asset-light structure, where the requirement of having tangible assets seems to be rather minimal. It also discusses the Shari’ah concerns that arise in the asset-light structure.