Goldman Sachs Bought Commerzbank’s Claim In Saudi’s Biggest Debt Saga: Sources | 7/16/2013 | Staff
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DUBAI (Reuters) – Goldman Sachs has bought a claim against The International Bank Corporation (TIBC), a Bahraini bank whose default 10 years ago triggered the biggest financial crisis in Saudi Arabia, three sources familiar with the matter said.

The U.S. investment bank bought $100 million of TIBC debt from Germany’s Commerzbank at the end of last year, two of the sources said, reflecting Goldman’s increased interest in Saudi Arabia.

Saudi - Investment - Conference - Year - Disappearance

Although it snubbed a Saudi investment conference last year following the disappearance of journalist Jamal Khashoggi, Goldman Sachs has since won a slew of mandates in the kingdom, including a lead role in Saudi Aramco’s debut international bond.

TIBC raised money in international markets, transferring the funds to now defaulted Saudi conglomerate Ahmad Hamad Algosaibi and Brothers (AHAB), in what a Cayman Islands court last year called one of the largest Ponzi schemes in history.

TIBC - Exchange - Deal - Deutsche - Bank

After TIBC defaulted on a foreign exchange deal with Deutsche Bank in 2009, AHAB – which denies knowledge of the scheme – collapsed, along with another Saudi conglomerate Saad, leaving an estimated $22 billion in unpaid debts.

TIBC, administered by Bahrain’s Central Bank, has a claim of around $3 billion against AHAB, a TIBC spokesman said, while more than 60 banks that have lent money to TIBC remain unpaid.

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