Back in 2009, the Dubai real estate entity Nakheel was the biggest in a rash of defaults on Islamic bonds (also known as sukuk).

Nakheel is still working to settle the claims of creditors two years later and wants to issue yet another sukuk as part of a settlement. And to top it all off, Nakheel will soon become a government owned enterprise which, given the UAE’s history of looking the other way as sensitive materials are smuggled into Iran and the UAE royal family’s chumminess with Osama Bin Laden, doesn’t exactly inspire confidence.

It will be interesting, to say the least, to see if any Western investors are dumb enough to be duped…


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