From Bloomberg earlier on Monday:
*DANA ASKS HOLDERS TO CONFIRM WISH FOR SUKUK TRUST DISSOLUTION
*DANA GAS SAYS ‘DISSOLUTION EVENT HAS OCCURRED’ ON SUKUK
Nov. 5 (Bloomberg) — Co. asks certificate holders to confirm whether they wish for the trust to be dissolved, according to statement carried by the regulatory news service.
That notice, says Exotix’s Gus Chehayeb, officially confirms that a technical default has occurred on Dana’s $920m Islamic bond, and that there was no official standstill agreement in place.
The default could also be a first for UAE public bonds. Read more
Goldman Sachs and JPMorgan Chase issued more than $2bn in new long-term debt on Wednesday, reports the FT, as the banks looked to take advantage of calmer markets and lock in funding from new sources. The offerings on Wednesday – which came a day after Goldman reported only its second loss as a public company – included 50-year bonds from Goldman pitched at retail investors with a $25 price tag and a yield of 6.5 per cent. JPMorgan sold $1.75bn of 10-year notes. Goldman also announced plans to sell its first sukuk bonds – debt compliant with Islamic usury law – via an offering on the Irish Stock Exchange as part of its diversification effort. The planned $2bn Islamic bond programme was approved on Wednesday by the Central Bank of Ireland and represents the first attempt by Goldman to tap the sukuk market. “There’s been a lot of investor demand lately,” said one banker. “When you see that and you’re done with earnings you take advantage of the stable window.” Read more
It seems there’s been some further developments in the sorry saga of the Palm Island state on Thursday.
According to Reuters sources, Dubai Group — a unit of the Dubai Holdings conglomerate owned by Dubai, has missed a profit payment on $1.5bn worth of Islamic loans maturing on August 2011. Read more
Finally, some good news:
May 13 (Reuters) – Dubai repaid a $980 million Islamic bond issued by developer Nakheel while another state-owned firm said it was confident of refinancing an upcoming loan as it digs out from a massive debt burden. Read more
Breaking pre-market news on Monday,
- Novartis agrees to buy a 52% stake in Nestle SA’s Alcon for $28bn in cash – statement. Read more
Here’s an updated version of short interest in that Nakheel sukuk — courtesy of Data Explorers:
Largely untested Islamic finance structures have, as we all know, been drawing unwanted scrutiny due to Dubai World’s recent debt-standstill antics.
However, that hasn’t stopped western corporates from adopting Islamic debt structures in a bid to raise much needed financing from alternative non-Western sources. Read more
Hindsight is a wonderful — and sometimes amusing — thing.
The UK is thought to be stalling on plans to become the first Western government to issue Islamic bonds – sukuks – and cut a name for itself as a global centre for shariah finance.
But according to Monday’s FT, HM Treasury has been stuck in a rut since the departure of Ed Balls, the former City minister and champion of Islamic financing in London – now minister for schools. Read more