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Dhaman’s Non-honoring of Sovereign Financial Obligations (NHSFO) policy is intended to financial institutions that provide loans to sovereign and sub-sovereign entities for infrastructure projects and other developmentally sound investments in Arab countries.


NHSFO protects the lender against losses resulting from the failure of an Arab sovereign or sub-sovereign entity to make a payment due under an unconditional financial payment obligation or guarantee. This includes a direct payment obligation of the government, or a government guarantee of the obligations of a state owned enterprise or a public/private joint venture. When they buy NHSFO, lenders transfer the risk from the borrowing entity to DHAMAN, an AA Stable Outlook S&P rated insurer.  Since NHSFO is Basel II compliant, it allows lenders to receive capital relief and to continue funding projects in DHAMAN’s member countries.


NHSFO is available for tenors of up to 15 years and the compensation rate is 90% of principal and interest.