International Investment Group (IIG), a Kuwaiti finance company, defaulted on a payment for its $200 million (Dh734.5m) Islamic bond, the second Kuwait-based firm to miss a sukuk payment in a year.
"IIG has communicated to the sukukholders through IIG Funding of its inability to make the periodic distribution amount of $3.35m due on April 12," IIG said yesterday in a statement posted on the Nasdaq Dubai bourse website. IIG said it appointed an "international" firm to review its business, before a financial restructuring at a later date.
Investment Dar, the Kuwait-based owner of half of Aston Martin Lagonda, missed a payment on a $100m Islamic bond in May, triggering concern about restructuring laws for such securities.
Global Investment House, Kuwait's biggest investment bank, defaulted on loan payments in 2008. The bank in December last year reached an agreement with its 53 creditors to restructure $1.73 billion in debt.
Sukuk sales to hit $30bn
Islamic bond sales should climb 50 per cent to $30 billion (Dh110bn) this year, driven by low interest rates and spending by governments on infrastructure programmes aimed at supporting growth, KFH Research said.
About $20bn of Islamic bonds announced last year are expected to be issued in 2010 and "another $10bn or more could potentially enter the pipeline," KFH Research senior analyst Tursina Yaacob said.