BlackRock and Ashmore Group will receive more than twice the average yield on emerging markets company sukuk after Dana Gas said it had finished the restructuring of US$920 million in Islamic bonds.
Dana, which missed sukuk payments in October, said on Monday it would split $850m of debt into convertible bonds and an ordinary sukuk and pay creditors $70m in cash. The five-year convertible bonds will pay a profit rate of 7 per cent and the ordinary sukuk 9 per cent. That compares with 7.5 per cent on the original sukuk and an average yield of 3.09 per cent on emerging corporate sukuk, an all-time low, HSBC/Nasdaq Dubai's Corporate US Dollar Sukuk Index shows.
"The proposed restructuring terms are quite favourable for Dana sukuk holders as they ensure preservation of initial capital while also provide a small upside in pricing," said Apostolos Bantis, a credit analyst at Commerzbank in London. "There is still value in Dana's assets and the company's longer-term prospects are positive."
Dana, based in Sharjah, said this month it received $48m from the Kurdish government in Iraq, one of two regions where payment delays forced the natural gas producer to restructure the debt. Egypt has also been settling payments for current production, said Dana.
Dana said it would also boost the collateral on the new sukuk by $300m, including money owed to it for gas produced in Egypt and certain UAE assets. The company will have the option to pay down the outstanding notes before maturity on October 31, 2017.
Dana shares have dropped 11 per cent this year to 40 fils, compared with a 12 per cent gain for the Abu Dhabi Securities Exchange General Index. The potential dilution for shareholders "remains substantially similar" to the existing terms, the company said.
Still, Dana's ability to service and pay the debt back rests on whether it can successfully make its operations in Egypt and Kurdistan "fully cash generative", said Abdul Kadir Hussain, the chief executive at Mashreq Capital in Dubai.
* Bloomberg News
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Europe’s rearming plan
- Suspend strict budget rules to allow member countries to step up defence spending
- Create new "instrument" providing €150 billion of loans to member countries for defence investment
- Use the existing EU budget to direct more funds towards defence-related investment
- Engage the bloc's European Investment Bank to drop limits on lending to defence firms
- Create a savings and investments union to help companies access capital
Analysis
Members of Syria's Alawite minority community face threat in their heartland after one of the deadliest days in country’s recent history. Read more
TOUR DE FRANCE INFO
Dates: July 1-23
Distance: 3,540km
Stages: 21
Number of teams: 22
Number of riders: 198
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
The Good Liar
Starring: Helen Mirren, Ian McKellen
Directed by: Bill Condon
Three out of five stars
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Is it worth it? We put cheesecake frap to the test.
The verdict from the nutritionists is damning. But does a cheesecake frappuccino taste good enough to merit the indulgence?
My advice is to only go there if you have unusually sweet tooth. I like my puddings, but this was a bit much even for me. The first hit is a winner, but it's downhill, slowly, from there. Each sip is a little less satisfying than the last, and maybe it was just all that sugar, but it isn't long before the rush is replaced by a creeping remorse. And half of the thing is still left.
The caramel version is far superior to the blueberry, too. If someone put a full caramel cheesecake through a liquidiser and scooped out the contents, it would probably taste something like this. Blueberry, on the other hand, has more of an artificial taste. It's like someone has tried to invent this drink in a lab, and while early results were promising, they're still in the testing phase. It isn't terrible, but something isn't quite right either.
So if you want an experience, go for a small, and opt for the caramel. But if you want a cheesecake, it's probably more satisfying, and not quite as unhealthy, to just order the real thing.