As we reported yesterday, Kuwait’s National Industries Group has asked for a 4-year extension on repayment of its Islamic bond (sukuk).
As might be suspected, NIG is in danger of becoming the next in line for the long line of defaults in the sukuk market.
Moody’s is on the cusp on downgrading NIG’s rating:
Moody’s Investors Service has placed the B3 corporate family rating (CFR) and probability of default rating (PDR) of Kuwait-based National Industries Group Holding (NIG) under review for possible downgrade.
Lest you think that this is an isolated example, Middle East Confidential points out that this is just the latest trouble when it comes to Islamic bonds issued by Kuwaiti firms:
The investment sector has not recovered from the 2008 global financial crisis and investors have found themselves in difficulties to refinance the debt they borrowed on short term bases during the boom years because of the rise in borrowing cost. Investors such as Investment Dar, co-owner of luxury carmaker Aston Martin, International Investment Group, International Leasing and Investment Co. and Global Investment House all had a bad experience.