S&P lowers rating of Gulf Finance House To 'SD/SD' (Selective Default) On Partial Debt Extension

Press Release

Bahrain-Based Gulf Finance House Lowered To 'SD/SD' (Selective Default) On Partial Debt Extension

*Bahrain-based Gulf Finance House (GFH) yesterday extended the maturity of $100
million of its $300 million syndicated loan by six months. *Because we consider the
partial debt maturity extension a "distressed exchange", we are downgrading GFH to
'SD/SD' (selective default) from 'CC/C'. *We expect GFH to soon extend the maturity
of another facility (subject to final approval from all syndicate members). Once the
maturity extension is finalized, we plan to reassess GFH's credit standing and
change the ratings accordingly.

PARIS (Standard & Poor's) Feb. 10, 2010--Standard & Poor's Ratings Services said
today it lowered its long- and short-term counterparty credit ratings on
Bahrain-based Gulf Finance House G.S.C. (GFH) to 'SD/SD' (selective default) from

"The downgrade to 'SD/SD' follows GFH's completion of the extension of maturity of
$100 million of its $300 million syndicated loan facility due Feb. 10, 2010," said
Standard & Poor's credit analyst Emmanuel Volland.

We understand that GFH has obtained consent for the partial extension from all
facility lenders. We understand that GFH achieved the partial extension by executing
the facility's "deed of extension" clause. The new maturity of the extended portion
is six months from Feb. 10, 2010.

"Under our criteria, we consider GFH's maturity extension to be a 'distressed
exchange' and therefore tantamount to a default, because the new maturity represents
a change to the facility's originally scheduled payment terms," said Mr. Volland.

We understand that GFH intends to soon restructure a second $100 million facility by
agreeing another partial maturity extension with facility members. The ratings would
consequently remain at 'SD/SD' pending completion or another resolution of the

"We expect to reassess the creditworthiness of GFH by analyzing, among other things,
its new liability structure, cash flow projections, and its overall business model
and strategy. Based on present information, we believe that the ratings on GFH could
be raised to the 'CCC' category from their current 'SD/SD' level," said Mr.

With total assets of $2.5 billion on Sept. 30, 2009, GFH is an Islamic wholesale
investment institution based in the Kingdom of Bahrain (A/Stable/A-1). GFH's main
focus and area of expertise is economic infrastructure projects. Geographic and
sector concentrations are high in our view because GFH has focused on real estate,
infrastructure, and industrial projects across its home region.

*Rating Implications Of Exchange Offers And Similar Restructurings, Update, May 12,