Sept 19 (The following statement was released by the rating agency)
Fitch Ratings has assigned Al Hilal Bank's (Al
Hilal; 'A+'/Stable/'F1') USD2,500,000,000 trust certificate issuance programme
an expected Long-term rating of 'A+(EXP)' and expected Short-term rating of
'F1(EXP)'. The issuing entity under the programme is AHB Sukuk Company Ltd.
The 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.
AHB is a special purpose vehicle, incorporated in the Cayman Islands, solely to
act as the issuer of the certificates (sukuk) and trustee for the certificate
KEY RATING DRIVERS
The ratings assigned to the programme are driven solely by Al Hilal's Issuer
Default Ratings (IDRs), as the sukuk structure is viewed as an
originator-backed/asset-based structure. Sukuk issuance under the programme are
senior unsecured obligations of Al Hilal, therefore the ratings are in line with
the bank's IDRs.
The originator backing is based on: i) Al Hilal's payment and performance
obligations under the sukuk transaction documents ranking pari passu with the
bank's other future or present senior unsecured obligations; ii) Al Hilal's
irrevocable undertaking to purchase the relevant sukuk assets from AHB on the
scheduled or any earlier dissolution dates; and iii) should the returns
generated from the sukuk assets exceed periodic distribution payments due, the
excess amount will be credited accordingly to reserve accounts. In the event
that the returns generated are insufficient to cover periodic payments due, the
shortfall will be covered via these reserve facilities and/or a liquidity
facility. Fitch views the provision of a liquidity facility as an obligation of
Al Hilal, as failure to provide liquidity if required would lead to a payment
default under the certificates, and in the agency's view this would also
constitute an event of default for Al Hilal.
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. As such, the sukuk are asset-based not asset-backed.
By assigning a rating to the issue, Fitch does not express an opinion on the
sukuk structure's compliance with sharia principles or whether the relevant
transaction documents are enforceable under any applicable law, including,
without limitation, the laws of the Emirate of Abu Dhabi and UAE federal law.
The ratings of the trust certificate programme are equalised with the IDRs of Al
Hilal, and are therefore highly sensitive to any rating action on Al Hilal.
Established in Abu Dhabi in 2008, Al Hilal offers a wide range of
sharia-compliant wholesale, retail, treasury and investment banking services. It
is fully-owned by Abu Dhabi Investment Council, and is regulated by the Central
Bank of the UAE.
The ratings of Al Hilal Bank are as follows:
Long-term IDR 'A+'; Stable Outlook
Short-term IDR 'F1'
Viability Rating 'bb-'
Support Rating '1'
Support Rating Floor 'A+'