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TIMELINE-Defaults: Islamic finance in uncharted territory

 (For a related story see [ID:nKLR480181], for other related
stories see [ID:nSP303656])
 Nov 5 (Reuters) - A sukuk default by Kuwait's Investment
Dar and debt restructuring at Saudi conglomerates have shaken
confidence in the $1 trillion Islamic finance industry, fanning
debate about investors' protection and investors' rights.
 Billed as safer than traditional banking due to
requirements for assets to underpin deals, Islamic bond holders
worry they may not have any more legal safeguards than
conventional counterparts in case of default, or perhaps even
less, partly due to the untested nature of the process.
 Debt restructurings at Saudi conglomerates Saad Group
[SAADG.UL] and Algosaibi have put about $9.6 billion of
investments at risk at 30 Gulf banks alone, and the fate of
Dubai government-owned property firm Nakheel's $3.5 billion
Islamic bonds, which mature in December, is being closely
watched.
 Here is a timeline of developments since late last year.
 2008
 Oct 16: Texas-based energy company East Cameron Gas, which
had issued $166 million in sukuk in 2006, files for bankrupcty.
A year later, the case to decide bondholders' rights was still
before a U.S. court.
 Dec 14: Kuwait's Investment Dar TIDK.KW Islamic
investment firm shocks markets, saying it is considering
selling up to 20 percent of luxury British carmaker Aston
Martin, and may borrow up to $1 billion to refinance debt.
[ID:nLE424729]
 Dec 21: Kuwait's biggest investment bank, Global Investment
House GLOB.KW, downgraded by two ratings agencies a week
earlier for allegedly failing to meet debt obligations,
appoints HSBC as an adviser with foreign lenders.
[ID:nLL438445]
 2009
 Jan 8: Global Investment House defaults on most of its
debt. At end-September, it had short-term borrowings of 389.8
million dinars ($1.38 billion), its website said. Total
liabilities stood at 806.7 million dinars. [ID:nL8123879]
 May 12: Investment Dar, Global Investment House's main
Islamic rival, defaults on a $100 million sukuk registered in
Bahrain and in the United States. The group is the first
Islamic Gulf company, and the second leading investment firm in
oil-rich Kuwait, to announce a default on debt repayment.
[ID:nLC281536]
 June 2: Privately-held $30 billion Saudi company Saad Group
[SAADG.UL] says it plans to restructure the debt of its units
hurt by a liquidity squeeze brought on by the financial crisis.
Ratings agency Moody's cuts its ratings on the group to junk
status. [ID:nN0167288]
 June 3: Credit agencies slash ratings for Saudi
conglomerate Saad Group to default status or withdraw coverage
altogether, saying Saad has ceased to pay creditors.
[ID:nL3334708]
 June 16: Saudi-based Ahmad Hamad Algosaibi & Bros Co (AHAB)
says it is about to start talks with creditors, after reports
it and Saad Group are seeking to restructure $10 billion in
debt. [ID:nLG841566]
 July 8: Malaysia central bank governor says no systemic
risks have arisen in the global Islamic finance industry from
problems related to Saudi Saad group's debt restructuring.
[ID:nKLA008319]
 July 13: Saudi Arabia creates special panel in connection
with the restructuring of heavily indebted AHAB, whose accounts
were frozen by the central bank in June, days after it froze
personal accounts of Saad head Maan Al-Sanea. [ID:nLD554720]
 July 14: Saad's sukuk investors mull setting up committee
to represent them at creditor meetings. It's common practice
for bondholders wanting to defend their positions ahead of a
debt restructuring. [ID:nLE513044]
 July 17: Saudi Arabia's indebted family conglomerate
Algosaibi files a lawsuit in New York alleging $10 billion in
loan irregularities involving billionaire Maan al-Sanea, the
head of the Saad Group, the Financial Times reports.
[ID:nLH567272]
 July 23: UAE central bank directs banks to take provisions
of 50 to 75 percent of their exposure to Saad and Algosaibi
over two years, to reflect probable defaults or losses.
[ID:nLN214179]
 -- Abu Dhabi Islamic Bank ADIB.AD declines to comment on
Saad, the day after a newpaper reports it has $67 million Saad
exposure due to a 2007 loan. [ID:nLN186787]
 Aug 1: Cayman Islands court freezes $9.2 billion of Saad
assets, including equity stakes outside the Gulf.
[ID:nLV613802]
 Aug 11: Moody's says its ratings on Islamic banks are
stable due to ample liquidity, high profit margins and
conservative lending; but that sector growth is hampered by a
lack of products to absorb abundant liquidity. [ID:nLB643725]
 Sept 6: Abu Dhabi Commercial Bank ADCB.AD, the United
Arab Emirates' third largest lender by assets, files a $30
million debt claim against a Saad Group unit [SAADG.UL].
[ID:nL6328632]
 Sept 7: Malaysian rating agency MARC downgrades 100 million
ringgit worth of Boon Koon Group Bhd's Islamic paper and notes,
removes ratings from MARCWatch. The reconditioning company's
weakened position stems from challenging industry conditions.
[ID:nKLR490635]
  Sept 23: Abu Dhabi Commercial Bank (ADCB) has more than
$600 million in exposure to the two Saudi, debt-laden
conglomerates, for which it will have to book additional
provisions, the lender says. [ID:nLN486412]
 Sept 28: Saudi Arabia's central bank governor says Saad
Group has struck an agreement with Saudi creditors to repay
syndicated and bilateral loans. [ID:nLS268341]
 Sept 30: MARC downgrades investment holdings company
Oilcorp Berhad's (Oilcorp) 70 million ringgit Murabahah and
other notes in expectation of an imminent default by Oilcorp.
[ID:nKLR501095]
 Source: Reuters






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