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Dana Still Cheap After 30% Surge as Cash Rolls In: Arab Credit


07 Feb 2013 08:24 GMT   التعليقات ()       إضافة تعليق       طباعة       إرسال لصديق


Dana Gas PJSC's Islamic debt, which posted its best three-month rally since 2009, may be set for further gains after profit rose and the company collected overdue payments in Egypt and Iraq, its biggest revenue sources.

Yields may contract further as credit risk recedes after a debt restructuring and Dana continues to receive cash from the two countries, said Gus Chehayeb, director of Middle East and North Africa research at Exotic Ltd. and Emad Mostaque, a strategist at Noah Capital Markets. Delays in payments by Egypt and Iraqi Kurdish authorities forced Dana to renegotiate terms on nearly $1 billion of debt after it missed an Oct. 31 payment, prompting speculation creditors might seek to seize assets.

"Dana Gas has been catching up with the broader corporate bond rally in the GCC as it offers attractive nominal yields," Mostaque said by phone Feb. 6. "Investors also now feel more comfortable about assets underlying the sukuk. It's potentially undervalued post restructuring, although investors would want to see more progress on payments from Egypt and Kurdistan."


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