Moody's Investors Service has issued a structured finance special report on Saudi Arabia. The report, which looks at the legal environment in the light of possible structured finance transactions, has been written by Stephen Roughton-Smith of Moody's. The report might be pointing to the fact that we may soon be seeing a securitization transaction emerging from Saudi Arabia.
One of the important points tackled in the report is that there is no legal precedent under Saudi Arabia's Islamic law.
Further, the legal system in Saudi Arabia is based on the sharia, (the body of doctrines that regulate the lives of those who profess Islam). In 1992 the Basic Law was introduced (described as a written constitution) which explicitly states that the sharia is the ultimate law in Saudi Arabia.
On the surface these may point to strong difficulties in structuring securitization transactions.
Nevertheless, the report states: "Moody's believes that carefully developed structured finance transactions can be executed successfully in Saudi Arabia."-courtesy of International Securitization Report