| From Islamicfinanceasia.com: Amid a generally cautious market mood in 2009, sovereign Sukuk enjoyed considerable popularity. What exactly constitutes a sovereign Sukuk? The answer may seem pretty straightforward, but tell that to holders of the Nakheel Sukuk which came dangerously close to a default at the end of 2009 before the Abu Dhabi government stepped in with financing aid.
Holders of the Nakheel Sukuk, the largest to date at US$3.52 billion, had bought the Sukuk on the assumption that, as a government-related company, its obligations would be honored by the government. But as it turned out, the Dubai government has no legal obligation to repay the debts of government-related entities, including Nakheel and its parent Dubai World.......................................Full Article: Source
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