(This article appears courtesy of International Financial Law Review, sign up for a free trial on their site) UAE – new subordination
Every country has its own idiosyncrasies
The Cooperation Council for the Arab States of the Gulf (GCC) region has seen an increase in conventional international debt securities issuances by borrowers in the past few years. Before 2004, only one debt issuance programme had been established and three international standalone bonds (not including any securities issued under the programme) issued. During 2004, three debt programmes were established and three standalone bonds (not including programme trades) were issued. In 2005, these numbers were 10 and four, respectively, and, in the first nine months of 2006, nine and eight.
The GCC region comprises the United Arab Emirates, the State of Qatar, the Kingdom of Bahrain, the State of Kuwait, the Kingdom of Saudi Arabia, and the Sultanate of Oman.
Each of the GCC region jurisdictions presents its own challenges in terms of structuring transactions to fit the existing legal and regulatory framework. Unlike many other jurisdictions around the world, these challenges are not tax-based but result from the influence of Islamic law and, in some cases, commercial laws that are not in tune with modern financing practices.