Shrugging Off a Debt Default, Gulf Islamic Financial Markets Show Maturity

After the request of Dubai World of six-month delay on payments on US$26 billion in debt in 2009, default became an extremely dirty word. Consequently, when this year Dana Gas failed to repay US$920 million on its sukuk, the local press was hesitant whether or not to call this a default. During the global economic and financial crisis, the UAE and Dubai in particular were shook by the credit rating agencies, investors and the international press. Fortunately, multibillion-dollar bailout from Abu Dhabi averted the worst. Until recently, companies, which faced inability to repay their debt, looked for restructuring before deadline. Dana Gas made an exception, however, they managed to come up with a restructuring deal very quickly, thus demonstrating development in terms of maturity of the Islamic finance market.