Securitisation a perfect fit for sharia

Amid the debt turmoil and resulting series of credit rating downgrades to have hit Dubai in the past year, one unusual and exotic instrument has retained its high standing throughout.

While private and government companies in the Gulf have been downgraded, rating agencies have left Tamweel’s $210m Islamic residential mortgage-backed security – structured by Morgan Stanley and Standard Chartered in 2007 – untouched.

Likewise, tranches of a $1.1bn Islamic asset-backed security called Sun Finance, issued by Sorouh Real Estate of Abu Dhabi in August 2008, have also kept their high ratings.