Lawyers and bankers said that the agreement on the major Islamic bonds (sukuk)-backed assets will help to increase the demand for this type of instruments in the fast-growing sector.
He said Ijlal Alvi, Chief Executive of the International Islamic Financial Market The market is looking forward to the formulation of a model within 12 to 18 months will help to reduce legal and operational complexities surrounding asset-backed instruments.
The bankers and lawyers that issuers currently does not provide a haven in the event of default The asset-backed instruments closer to the spirit of the law as it includes a transfer of tangible assets.
The investor becomes the legal owner of these assets in the event of default.
The structure of instruments for checking, after lagging in some quarters for a large payment and is about some of the defaults in the global financial crisis. Injured investors by surprise when they realized that the majority of instruments based on the assets of their holders could not put their hands on it immediately after the occurrence of defaults.
Said Tim Ross of the company for Latham and Watkins Land in Dubai 'people really did not talk about asset-backed instruments, only after the tests bear'. He continued 'surprised some investors .. They had to request a refund is not guaranteed'.
In the wrath of investors, market watchers felt that the sector into a model of securitization.
But despite that, still be structured around 90 percent of transactions Kskok based on assets.
Said Gregory Mann of Clifford Chance law firm in Dubai 'despite the implementation of transactions which is based on assets - both conventional and Islamic - in the Gulf, however, made more difficult and expensive for companies'.
He added that these transactions are usually faced with legal requirements and more stringent analysis by credit rating agencies as well as many of the companies in the region lack the strong internal systems to service the assets and announce the results of its work for the investors and rating agencies.
The homage Alvi, Chief Executive of the International Islamic Financial Market that there are legal challenges in some areas, makes the transfer of ownership of assets more expensive and a waste of time.
The main aim of the Convention to provide a normative basis can Issuers of structured instruments which, according to legal mandates and to increase awareness of its products.
He also said, 'in this credit environment preferred creditors direct recovery of the assets'. He added 'even though the instruments are based on the assets structure is sound, but I also think that it is better to encourage greater asset-backed instruments in the medium term to long term'.
Bankers said that despite the challenges, but that the companies will look to issue more asset-backed instruments, if requested by investors.
The banker said in an Islamic bank in the Gulf 'between investors there is no real aspiration to it.
The majority of the corporate world comes from a background that traditional instruments are based on the assets is closer to a form of religion which used to deal with it'. He added 'the majority of investors do not care enough, despite a wave of anger following the defaults'.
التسميات
Orbits