‘Restructuring of debt is routine’

MANAMA: Over $660 billion worth of international global securities has been restructured in the past eighteen months, according to Andrew Mulley, head of issuer services for EMEA at Citigroup.

Mulley, who was in Bahrain to participate in the 16th World Islamic Banking Conference (WIBC), said the restructuring of a debt should be treated as a routine and not as a sign of panic.

Referring to Dubai World’s example for holding the payment for six months for its outstanding payments, he said there was no need to send a wrong message and pre-judgment on Dubai World issue.

Explaining the possible reason behind the restructuring, Mulley said some institutions have access liquidity and try to reduce the debt or take advantage for a more favorable rate.

“Some of them don’t have money and go for funding-raising including through the Islamic bonds or sukuk. In our view and because of these principal reasons we have seen a lot of restructuring especially in the wake of the financial meltdown. There is no need to panic about the situation,” he said. “Many economies are experiencing stress period which is a logical market or business cycle. But it seems the problem behind unnecessary panic is perhaps no communication by the companies with the stakeholders.