Murabahah bonds are securities transferable. They show the joint ownership of the holder in the financial asset obtained based on the Murabahah contract. The primary market of these bonds is based on buying and selling cash and credit of specific assets, which is permissible problem from the point of view of the Shariah principals, while the secondary market of the bonds is based on the permission to buy and sell debt.

Primary Market

The buyer and the seller cannot have ownership unity in Murabahah bonds.
Proviso: If the buyer (money for the purchase of bonds) or the seller (products and assets subject to murabaha) have secured from sources other than those of the seller/buyer, he can issue the murabaha bonds.

. Issuance of Murabahah bonds can only be valid for cash purchase and long-term sale of property, and its issuance for debt payment is not permissible from the Shari'a point of view.
. In case of sale of Murabaha bonds, with or without discount, the intermediary company, on behalf of the owners of the bonds, compromises with the originator, so the originator buys and sells the goods through the funds obtained from the issuance of the bonds. If the collected funds are in excess of the price of the goods, he owns them and if there is a deficit, he compensates from his own property.

. When the contracts for the issuance of murabaha bonds are concluded, the originator shall be committed to perform the murabaha of goods under certain conditions and at a certain time, otherwise, the originator shall to pay the amount of money for guarantee.
. It is permissible to collect the amount of money for guarantee in the case of a condition in the contract, only on the amount of the first debt, and it is not permissible to collect the amount of money for guarantee on the added one.
. In order to obligate the originator to perform the matter of representation and pay the amount of money for guarantee, it shall be stipulated under the conveyance that is arranged between the originator and the bond holders, not to cancel the representation and paying the amount of money for guarantee.

. It is necessary to conclude a sale of murabaha (Bey’a Murabaha) from the funds obtained in the process of issuing murabaha bonds, and it is not permissible to use the resources obtained from the issuance of murabaha bonds in other cases (such as paying personnel fees or settling other debts).
. If the engineering, equipment procurement and construction (EPC) contract package is conventionally arranged in such a way that the purchase of equipment is done by the contractor and there is also the intention of issuing murabaha bonds in order to finance the employer, it is necessary to make the essential reforms in the contract, it shall be done in such a way that the purchase of equipment by the employer is done on behalf of the bondholders.

The Asset Base of the Bond
• It could be based on the three following ways:

1- Services: In this case, the type and amount of service shall be clearly and precisely defined.
2- Intangible assets: if it is disciplined and determined in the form of exchange or conveyance.
3- Tangible assets and securities whose nature is tangible assets (such as shares, partnership bonds and leasing), except for securities whose nature is debt-based assets, such as murabaha bonds, treasury bonds, standard parallel Salam and Istisna bonds that lead to debt. Due to the prohibition of debt for debt sales, they cannot be used as the asset base of murabaha bonds.

Proviso 1: Murabahah bonds can be publicly issued in such a way that the investors gives the power of attorney in the use of goods and services to the originator and sell them to investors at a higher price in the form of Murabahah Bey’a.
Proviso 2: Goodwill rights as an independent asset can be traded when it is stipulated under the asset lease contract.

• Investors can give the power of attorney to the originator in purchasing murabaha bonds.
• The originator can use the funds obtained from the issuance of bonds in a gradual manner.
• If the originator invests the funds obtained from Murabaha bonds, the profit from the investment belongs to the owners of the bonds.

Murabahah bonds can be exchanged or converted into shares.

The Rate of return on bonds

. The profit paid in Murabahah bonds cannot be floating.
. In gradual murabaha, the profit of each murabaha can be calculated in such a way that the rate of return on the bonds and the investment’s rate of return cover the rate of return on murabaha bonds.
. The government can compensate all or part of the unforeseen inflation based on the legal obligation.

The Issuance of Bonds in Foreign Currency
Murabahah bonds can be issued in foreign currency. In this way, by paying a certain amount of foreign currency or its Rial equivalent (at the daily rate of the open market), the investors give power of attorney to the intermediary to buys a certain asset in cash, and provide it for the originator with the form of a murabaha foreign currency installment contract (who is independent from the seller).
According to the contract, the installments are paid to the investors in the form of foreign currency or its Rial equivalent (at the daily free market rate) at the specified due dates.