Shaken, Not Stirred: Aston parent company reportedly defaults on $100M Islamic bond
Investment Dar, the Kuwaiti firm that owns part of Aston Martin, has reportedly defaulted on payment for a $100 million Islamic bond that was due on April 27. In the process, Bloomberg says it has become the first Persian Gulf company to default on an Islamic bond.
In December of last year, Dar was considering selling a 20- to 30% stake in Aston Martin in order "to profit financially or technically" it said at the time. It was also trying to refinance its short-term debt, attempting to tap banks for 200 to 300 million Kuwati dinars ($691 million-$1 billion U.S.), the upper end of which being more than Dar paid for its share of Aston Martin in the first place.
According to Bloomberg, Dar remains open to selling peripheral assets to shore up its position and it is working with Credit Suisse to restructure. The investment firm has another big Islamic bond maturing in September, and even though the Kuwaiti government is working with national banks to assist them in the downturn, Dar probably doesn't want to be seen setting a pattern of stumbling. Thanks for the tip, Bo!
[Source: Bloomberg]
Reader Comments (Page 1 of 1)
cdwrx 4:51PM (5/12/2009)
An Islamic Bond is...?
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Polly Prissy Pants 4:57PM (5/12/2009)
An Iranian with a license to kill? Heh, I kill myself.
FousString85 4:57PM (5/12/2009)
... shaken, not stirred.
PJ 5:08PM (5/12/2009)
... and his sexy sidekick, Ankle Galore!
zamafir 5:10PM (5/12/2009)
shouldn't it be Sakk'n and not stirred?
apearlman 5:43PM (5/12/2009)
http://en.wikipedia.org/wiki/Islamic_banking
why not the LS2LS7? 10:06PM (5/12/2009)
It's a zero coupon bond.
It just means that a fixed amount is due at maturity (in this case $100M) and the bond is initially sold at a discount to that. The difference between the price paid for the bond and what it pays back at maturity is the profit (for the bondholder) on the bond, you can run it through a formula to turn it into a compound interest rate if you want.
Not sure why it becomes necessary to call this an Islamic bond when we already have a term for it.
skicat 5:10PM (5/12/2009)
They cut off the hands of petty thieves. Whatta they gonna cut off these guys?
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C.W. 8:17AM (5/13/2009)
yeah... they're dead.
DaddysFavourite 5:15PM (5/12/2009)
An Islamic Bond is not structured with interest. The concept of interest is Jewish.
So the Islamic banking community has some elaborate method of disguising profit worked into loans.
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Ray 6:07PM (5/12/2009)
Why does everyone get mad when I point at something dumb and say 'Well that's Jewish'? I think it's funny.
JZeke 5:35PM (5/12/2009)
Do I love wikipedia:
http://en.wikipedia.org/wiki/Sukuk
"Sukuk (Arabic: صكوك, plural of صك Sakk, "legal instrument, deed, check") is the Arabic name for a financial certificate but can be seen as an Islamic equivalent of bond. However, fixed income, interest bearing bonds are not permissible in Islam, hence Sukuk are securities that comply with the Islamic law and its investment principles, which prohibits the charging, or paying of interest."
The more you know...
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Tater 5:48PM (5/12/2009)
Which of course means they are charging interest, only they jump through absurd technical hoops and employ deceptive language all in an effort to convince themselves they are not equal to money grubbing infidels everywhere.
mesama 10:20AM (5/13/2009)
Islam doesn't permit interest. Hence, Islamic banking is based on the idea of investing where you share in the loss/profit, rather than getting guaranteed returns.
Sorry, it has nothing to do with "infidels." The idea is that you have to share in the risk, and not just make money off of your money.
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Bobby S. 8:55AM (5/14/2009)
Maybe they should stop buying chrome SLRs and D&G special edition cars for 10x the amount the original car is worth and do some good.
Bastards
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