Dana Gas, which missed sukuk payments in October, said yesterday it will split $850 million of debt into convertible bonds and an ordinary sukuk and pay creditors $70 million in cash. The five-year convertible bonds will pay a profit rate of 7 percent and the ordinary sukuk 9 percent. That compares with 7.5 percent on the original notes and a yield of 6.55 percent for the BofA Merrill Lynch All Maturity Global High Yield Index.

"The proposed restructuring terms are quite favorable for Dana Gas' sukukholders as they ensure preservation of initial capital while also provide a small upside in pricing," Apostolos Bantis, a credit analyst at Commerzbank AG in London, said by e-mail yesterday. "There is still value in Dana Gas's assets and the company's longer term prospects are positive."

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