Islamic Finance Daily Brief — Wednesday, October 28, 2026
Assalamu alaikum! Today's Islamic finance stories — and what to learn from them.
Today's stories
🌍 1. Arada closes its sukuk refinancing as $169 million is tendered
Arada Developments has announced the results of its tender offer for its sukuk due in 2027. Holders tendered $169,179,000 of certificates by the October 26 deadline, just short of the $180 million maximum the company set. The tender settles on November 2, with holders paid 100% of face value. The refinancing was conditional on a new issue, and that issue is now done: a $400 million five-year sukuk priced at an 8.875% coupon and a 9% yield, with orders topping $650 million. The new sukuk has been listed on Nasdaq Dubai under Arada's new $1 billion programme.
What to learn: Let's understand first the basics of how a sukuk buyback happens. The issuer tells its stakeholders, the people holding its sukuk, that it wants to buy back the old certificates before they mature. It shares the terms with them: the price it will pay, the yield, and any discount.
Yield in this context is the annual return a holder earns on the money put in, shown as a percentage. Discount is the gap when a certificate sells for less than its face value. A certificate with a $10,000 face value that sells for $9,950 sells at a $50 discount.
Here is the maths, one step at a time. Start with the coupon. The new sukuk pays a coupon of 8.875%. On $10,000 of face value, that is $887.50 a year. Next, the yield. A 9% yield means the buyer wants to earn 9% a year on the money actually paid. On $10,000, that is $900 a year. Now compare the two. The coupon pays $887.50. The buyer wants $900. The coupon falls $12.50 short each year. So the buyer pays less than $10,000 upfront. Paying $9,950 instead of $10,000 gives the buyer a $50 gain at maturity, when the full $10,000 comes back. Spread over five years, that gain is $10 a year. Add it to the coupon: $887.50 plus $10 is $897.50 a year, on $9,950 actually paid. That works out to about 9%. That is why a 9% yield against an 8.875% coupon means the certificate sells for about $50 less than face value.
Now apply it to Arada. Say you hold $10,000 of Arada's old sukuk. Arada offered to buy it back at 100% of face value, so your $10,000 came back in full. There was no discount on the old certificates. The issuer paid for that buyback with money raised from a new sukuk, the one priced at the discount explained above.
A tender offer was covered in the Oct 20 edition. That edition covered the launch of this offer.
🔗 Source: Investegate
Learn
Qard Hasan: a loan given for good
A loan has two sides. The lender gives the money. The borrower receives it and pays it back. Qard hasan is a benevolent loan. The borrower repays exactly the amount borrowed. The lender charges no interest and earns no return from the loan.
The two sides agree on the amount and the repayment terms at the start. The borrower may repay in one payment or in instalments over agreed months. If repayment runs late, the amount owed does not grow. No extra charge is added for the delay, because any increase over the amount lent would be interest.
Qard hasan differs from charity in one clear way. Charity is given with no expectation of return. A qard hasan loan is expected back in full, so the same money can be lent again to the next person in need. It also differs from a sale-based financing contract. Murabaha was covered as a concept in the Oct 8 edition. In murabaha, the financier buys an asset and sells it at a disclosed markup. In qard hasan, there is no asset sale and no markup. The loan itself is the whole transaction.
Technology now tracks these loans the way any lender tracks repayments. A qard hasan platform keeps a ledger for each loan: the amount lent, the repayment schedule, and every payment received. The borrower pays by bank transfer or mobile money, and the payment is matched to the loan record. The platform sends reminders before each instalment falls due, and the lender can see the balance at any time. Community platforms run this way today. GoodlyLoan in Bangladesh records repayments on its platform and lets donors track the status of each loan, with payments made through bKash, Nagad, Rocket, or bank transfer. A Dawoodi Bohra community app tracks contributions, balances, documents, and repayments through a mobile interface. The wider microfinance world uses the same pattern at larger scale. Open-source software called Mifos X records the full loan lifecycle, from application to final repayment, and matches mobile money payments to the ledger automatically.
A simple example shows how it works. A shopkeeper needs money to restock before a busy season and has no cash on hand. A community benevolent fund lends her the amount she needs. She stocks her shop, sells the goods, and repays the fund in instalments from her sales. Each instalment is logged against her loan record, and the fund then lends the same money to another shopkeeper. The shopkeeper paid back exactly what she borrowed, and the fund earned nothing from the loan.
In the USA, there is no standard bank product called qard hasan. A person in the same position usually turns to family, a nonprofit emergency fund, or a conventional loan. Benevolent loans in Muslim communities are usually run through mosques, charities, and community funds rather than banks.
All sources
- Investegate — Arada Sukuk Ltd Tender Results Announcement (Oct 27, 2026)
- EnterpriseAM — Arada raises USD 400 mn sukuk in first real estate debt issuance since war began (Oct 23, 2026)
- GoodlyLoan — Interest-free loan platform: repayment logging and donor tracking, payments via bKash, Nagad, Rocket, or bank transfer
- India P2P — Dawoodi Bohra community app for qard hasan: contributions, balances, documents, and repayment tracking
- SolDevelo — Mifos: open-source microfinance platform for loan lifecycle and repayment tracking