Tamweel sukuk gets A3 rating with stable outlook

Moody's Investors Service has assigned a provisional (P)A3 rating to the Sukuk Trust Certificates 2013 to be issued by Tamweel Sukuk Limited.

"The rating outlook is stable," said a statement from Moody's, adding the amount of sukuk to be issued is not yet determined at the date of this press release. The sukuk will be issued in dirhams.

Moody's said Tamweel Sukuk Limited is a special-purpose entity, incorporated in the Cayman Islands and created to issue Sukuk Trust Certificates to investors and use the proceeds to acquire a pool of Shariah-compliant assets from mortgage finance company Tamweel, as asset originator and seller.

"The Certificates' (P)A3 rating and stable outlook are based on the current A3/Prime-2 issuer ratings and stable outlook of Tamweel, assigned in November 2007," it said.

Under the agreements, certificate holders have no rights to cause any sale or disposition of the trust's assets except as expressly provided under the purchase undertaking and sale undertaking deeds.

Moody's understands that the trust may be dissolved either at maturity or earlier if any of a number of specified dissolution events occurs.

The holders also have the benefit of an investor put right, which would be triggered if there is a downgrade of Tamweel's long-term rating by at least two notches as a direct result of the Government of Dubai reducing its direct or indirect ownership of the issued share capital of Tamweel.

With the boom in the property market, mortgage finance firms are reaping rich dividends. Tamweel is a mortgage finance company headquartered in Dubai, with reported total assets of Dh8.5bn last year.