Kind of scary, GE is becoming compliant with the Islamic Sharia law.

http://online.wsj.com/article/SB1000...119764754.html

NEW YORK --General Electric Capital Corp., GECC, the finance unit of
General Electric Co. sold its first sukuk Thursday, the biggest
Islamic bond ever from a U.S. company, and said it intended to raise
more funds in the Shariah-compliant debt market in the future.

GE Capital, the world's biggest nonbank finance company, sold $500
million of the five-year bonds, which priced at a spread of 175 basis
points over U.S. Treasurys, a banker familiar with the transaction
said Thursday. That is only a little bit more than GE Capital paid
earlier this month when it issued $1.5 billion of five-year
non-Islamic bonds at 155 basis points over Treasurys.

Sukuks differ from conventional Western bonds in that they don't pay
interest, which is forbidden under Shariah, the legal code of
Islam. Sukuks are backed by physical assets from which returns are
derived and shared with investors.

In announcing the deal, GE Capital said it was "the first
U.S. corporate issuer of an Islamic bond," but that appears not to be
the case. International Finance Corp., a part of the World Bank in
Washington, raised $100 million in Islamic bonds in October, according
to data provider Dealogic. IFC had also sold an Islamic bond in 2004,
which Dealogic said was the first U.S.-issued sukuk since at least
1995.

The International Bank for Reconstruction and Development, another
branch of the World Bank, sold $200 million worth of sukuk in 2005,
Dealogic added, and the oil exploration firm East Cameron Partners
sold $167.67 million in 2006. East Cameron filed to reorganize its
debts under bankruptcy court protection in 2008 and is still working
through that process.

In an emailed statement, GE's senior vice president and treasurer
Kathy Cassidy said the company's first sukuk is "strategically
important" in opening up a new investor base for GE Capital.

"We have been focused on diversifying our alternative funding sources
to include global deposits and covered bonds, and transactions such as
the sukuk allow us to make progress in meeting our objectives,"
Ms. Cassidy added. "We intend to be regular issuers in the sukuk
market and are heartened by the support we have seen in this first
transaction."

GE's issue may herald a revival in the global sukuk market. Issuers
sold more than $27 billion in Islamic bonds in 2007, according to data
from Dealogic, although the sum fell to $14.2 billion last year as
investors were spooked by the liquidity crisis.

Investors' confidence in the sukuk market has returned over recent
months as hopes of an economic recovery gain traction. Dealogic said
that $16.8 billion of sukuks, excluding Thursday's deal from GE
Capital, have been sold so far this year.

"The fact that a corporation of the standing of GE decided to enter
the sukuk market provides significant support and credibility to the
sukuk market," said Deon Vernooy of the Emirates Investment Services
unit of the Emirates NBD Group. E.I.S. is an active sukuk investor,
though it routinely declines to discuss specific investments.

"Middle East investors would find this of particular interest and the
strong support for the instrument from this part of the world is not
surprising," Mr. Vernooy added. "We expect that more issuers will
follow the lead of GE in this regard."

The banker on GE Capital's Islamic bond said 50% of the investors came
from the Middle East, while the remaining 50% was subscribed to by a
mix of Asian and European investors.

The sukuk shows "GE Capital's efforts to access the global market for
capital," said CreditSights analyst Adam Steer.

Mr. Steer noted that year-to-date, GE Capital has borrowed in eight
non-U.S. dollar capital markets.

"It's a benefit to the company because you're not reliant on one
currency for capital, especially when you're a global business" and
operating in non-U.S. dollar markets, Mr. Steer said.

"Ignoramus30893" wrote in message
...
Kind of scary, GE is becoming compliant with the Islamic Sharia law.

http://online.wsj.com/article/SB1000...119764754.html

NEW YORK --General Electric Capital Corp., GECC, the finance unit of
General Electric Co. sold its first sukuk Thursday, the biggest
Islamic bond ever from a U.S. company, and said it intended to raise
more funds in the Shariah-compliant debt market in the future.



snip

Funny how religion (& many other areas) can use semantics can get around a
barrier to profit.