A type of sukuk that are both senior (senior sukuk) and unsecured. Senior sukuk are a type of sukuk structure in which sukuk holders get paid in full before other stakeholders (claim holders). Thanks to this high-ranking claim over the underlying assets in the event of default or redemption, these sukuk are considered senior. Seniority implies that the sukuk holder’s claims rank superior vis-à-vis others claim holders against the sukuk issuer, and the sukuk holders belonging to the same rank (tranche) enjoy equal rights and rank pari passu as to each other.

Senior unsecured sukuk are also not collateralized by their underlying assets. In other words, the sukuk-holders do not have a direct connection with the underlying assets. In the case of default, sukuk holders cannot have access to the assets, though still have certain claims as holders of the certificate, not owners of the underlying assets.

In the majority of unsecured sukuk transactions, the sukuk-holders (investors) have no direct recourse to the underlying assets, per se, or any recourse is contractually restricted to selling the asset back to the obligor. The repayment of the principal amount invested is ultimately dependent on the exercise of a purchase undertaking by the obligor of the assets at maturity or in the event of a default.