Murabahah Sukuk A Jurisprudential Study of Issuing Tranched Ijarah and

Abstract

Credit enhancements are methods that are used in structured finance for promoting the credit quality of financial instruments. One of the most important mechanisms for improving the credit quality is Tranching financial instruments. This mechanism is mentioned as a structural and internal credit enhancement. Tranching decreases financing costs and improves the quality of financial instruments. It is based on priority of receiving profit and paying loss. In this research, we have approved Tranching mechanism in the structure of ijarah and murabahah based on dhaman, insurance, sulh and stipulation. It is important to use this mechanism in Islamic financial instruments. In this research, at first, we explain Tranching mechanism and second, we survey the application of this mechanism in ijarah and murabahah sukuk and then we analyze the compliance of this mechanism with Shariah principles.