Source: San Diego Union-Tribune
Wire Service: AP
Morgan Stanley plans to bring to market what it believes will be the first sale of an Islamic bond by a multinational corporation, a spokesman for the firm said Wednesday.
The bond sale is being coordinated by Morgan Stanley's Dubai office. Hugh Fraser, a spokesman for Morgan Stanley in London, declined to identify the corporation.
The offering could take place this quarter and comes as multinational corporations are experiencing difficulties in U.S. corporate debt markets due to the ripple effects of the subprime crisis. This has left corporate borrowers eager to find fresh sources of funds, particularly in the wealthy Persian Gulf states.
Islamic bonds are known as “sukuk” and generally are structured as profit-sharing plans so that the bondholder's income resembles a rent payment. Islamic Sharia law forbids the use and payment of interest, and investment in businesses linked to alcohol and gambling.