• Home
• Islamic Finance
• News Article

Fitch Rates Tamweel's Trust Certificate Issuance Programme

Fitch Ratings-Dubai/London- 08 December 2011: Fitch Ratings has assigned Tamweel PJSC's ( Tamweel or the originator) series of Guaranteed Certificates under the USD1bn trust certificate issuance programme an expected rating of 'A(exp)' and Unguaranteed Certificates under the same programme an expected rating of 'BBB-(exp)'. The issuing entity under the programme is Tamweel Funding III Ltd (TF).

The final ratings are contingent on the receipt of final documents conforming to the information previously received by Fitch. The ratings are assigned to the programme and not to the certificates issued under the programme. There is no assurance that certificates issued under the programme will be assigned a rating, or that the rating assigned to a specific issue under the programme will have the same rating as the rating assigned to the programme.

TF is a special purpose vehicle (SPV), incorporated in the Cayman Islands solely to act as the issuer of the certificates (Sukuk) and trustee for the holders of the certificates.

The Guaranteed Series' rating is based on the Long-term Issuer Default Rating ('A'/Stable) of Dubai Islamic Bank ( DIB ). Each Guaranteed Series will be subject to a supplemental deed of guarantee that will set forth, inter alia, the maximum amount to be guaranteed with respect to such Guaranteed Series. Before assigning a rating for Guaranteed Series, Fitch will therefore review the supplemental deed of guarantee before assigning a rating to a specific issuance on a case-by-case basis. The first Guaranteed Series is expected to be for USD300m.

While the guarantee, which is governed by English law, may not be enforceable under applicable law, including, without limitation, Dubai law or UAE federal law, Fitch considers the provision of a guarantee by DIB as part of this transaction as a strong indication of DIB 's intention to support Tamweel and its obligations. Fitch's ratings for the Guaranteed Series therefore reflect the agency's belief that DIB would stand behind its obligations under the guarantee.

DIB undertakes that its obligations will at all times rank at least pari passu with all its other present and future unsecured obligations. Therefore, Fitch assumes that DIB 's obligations with respect to each Guaranteed Series will rank pari passu with DIB 's unsecured obligations.

The Unguaranteed Certificates' rating is driven solely by Tamweel 's Long-term Issuer Default Rating ('BBB-'/Stable) due to the Sukuk's structure, which Fitch understands includes the following features: 1) Tamweel 's obligations under the documentation rank pari passu with Tamweel 's other unsecured obligations; 2) Tamweel undertaking to purchase the Sukuk assets on the scheduled or any earlier dissolution dates from TF; and 3) On any periodic distribution date, if the returns generated from the Sukuk assets are insufficient to cover the periodic distribution payments due, Tamweel 's undertaking to pay further amounts to the SPV to remedy such shortfall.

Fitch understands that certificate holders have a beneficial interest in the cash-flows generated by the underlying assets, but do not have recourse to those assets.

By assigning ratings to the programme and certificates issued under it, Fitch does not express an opinion on the programme structure's compliance with Shariah principles or whether the relevant transaction documents are enforceable under any applicable law, including, without limitation, Dubai law or UAE federal law.

Established in 2003, Dubai-based Tamweel is a leading Shariah-compliant residential mortgage company 58% owned by DIB (which is in turn 30% owned by the Investment Corporation of Dubai, the investment arm of the Dubai government).

A full list of Tamweel 's and DIB 's ratings is available on www.fitchratings.com:

Contact:
Primary Analyst
Mahin Dissanayake
Director
+971 4 408 1806
Fitch Ratings Ltd,
DIFC, Gate Village,
GV07 Level 1, Office 2,
PO Box 506527,

Secondary Analyst
Philip Smith
Senior Director
+44 203 530 1091

Committee Chairperson
Bridget Gandy
Managing Director
+44 203 530 1095

Media Relations:
Michelle James, London,
Tel: +44 0203 530 1574,
Email: Michelle.James@fitchratings.com.

Additional information is available at www.fitchratings.com. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable criteria, 'Global Financial Institutions Rating Criteria', dated 12 August 2011, and 'Rating Sukuk', dated 16 August 2011 are available at www.fitchratings.com.

© Press Release 2011