Dana Gas sukuk ruling “credit positive”

Moodys_websiteA ruling in a dispute over sukuk issued by Dana Gas is “credit positive” for Islamic finance, according to a ratings agency. The English High Court ruled on November 17 that the purchase undertaking attached to the sukuk was valid and enforceable under English law. “The ruling by the English court is credit positive for the Islamic finance industry because it adds certainty around the legal enforceability of the sukuk,” said ratings agency Moody's. Issued in 2007 and restructured in 2013, the disputed sukuk are of the Mudaraba type. As with other forms of sukuk, they were structured to provide returns associated with conventional bonds within an Islamic financial framework. In June 2017, after apparently discovering the sukuk were not sharia-compliant, Dana Gas proposed to exchange the sukuk for new securities. According to Moody's, the new securities had inferior terms with a profit rate less than half that previously offered. Sukuk holders took the company to court. Dana Gas says it will appeal the English High Court ruling. ©2017 funds global mena

Executive Interviews

INTERVIEW: Protecting the investment

Nov 23, 2017

Rasmala’s trade finance fund recently passed $100 million in assets. Doug Bitcon, head of credit strategies, explains why he has to be hands-on.

EXECUTIVE INTERVIEW: A natural interest in the topic

Mar 08, 2017

Since 2016, Guillermo Ortiz has been a chairman of Latin America’s BTG Pactual. The former central banker of Mexico talks to Nick Fitzpatrick.


ROUNDTABLE: Charting the pace of reform

Nov 23, 2017

Saudi Arabian index inclusion, the onset of taxes and the Dana Gas controversy were among the issues discussed by our cross-industry panel. Chaired by George Mitton in Dubai.


Mar 08, 2017

The move to a three-day settlement cycle, the appearance of new stock exchanges, and recent rules on hedge funds were discussed by our panel in Cape Town. Chaired by George Mitton.