The link below will take you to a detailed explanation, from an Islamic perspective, of Islamic bonds, known properly as sukuk, There are some awkward translation errors in the document, but it is still very understandable. The article delves into the various types of sukuk.
Two other aspects of note:
1. The article indicates that conventional financial instruments to “flourish” in Islamic society.
2. The article admits that the sukuk system makes liberal use of derivatives, which could be one reason why the default rate on sukuk has been so high.
Sukuk Structures–Types and Risks Underlying