Kuwaiti finance company defaults on $200m Islamic bond

14 April 2010

Kuwait International Investment Group bond could be dissolved

Kuwait’s International Investment Group (IIG) defaulted on a $200m Islamic bond (sukuk) on 12 April and has stated that a ‘dissolution event’ will occur should the default continue for at least three working days.

This means bond holders would be asked to vote on dissolving the sukuk, which is set to mature in July 2012.

In a filing with Nasdaq Dubai, IIG said: “Kindly be advised that IIG has communicated to the sukuk holders through IIG Funding Limited, (issuer of its $200m sukuk), of its inability to make the periodic distribution amount of $3.3m due on 12 April.”

Nasdaq Dubai suspended trading in the bonds effective on the morning of 13 April, but lifted the suspension later in the day after IIG made an announcement stating that further notices will be issued in accordance with the bond agreement.

Kuwait’s Investment Dar was the first company in the region to default on a major sukuk in May 2009.

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