Standard & Poor's Ratings Services

Nakheel repayment has no immediate impact on Dubai GREs ratings, says S&P

The Government of Dubai announced that, with the backing of the Emirate of Abu Dhabi (AA/Stable/A-1+), it would be providing US$10 billion in financing to Dubai World and its subsidiaries, through its financial support fund.

S&P: Abu Dhabi's TDIC Sukuk Ltd. Assigned prelimary rating 'AA'

Press Release of S&P:

We are assigning our preliminary 'AA' rating to TDIC Sukuk Ltd.'s certificates issuance program, under which it can issue up to $1.45 billion certificates (sukuk al-ijara).

The rating is equal to, and is fully reliant on, the rating on Tourism Development and Investment Company.

LONDON, October 1, 2009--Standard & Poor's Ratings Services today said it had assigned its preliminary 'AA' rating to TDIC Sukuk Ltd.'s certificates issuance program, under which it can issue up to $1.45 billion certificates (sukuk al-ijara). The rating is equal to, and is fully reliant on, the rating on Tourism Development and Investment Company (TDIC; AA/Stable/A-1+). The preliminary rating is based on information as of Oct. 1, 2009. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings.

S&P sceptical on Sukuk market growth

Sukuk growth might be limied due to higher costs of structuring, issuing, accounting fees, real estate downturn, and low hydrocarbon prices, says S&P in a report. Nevertheless, it said sukuk-based financing remained the most attractive means of raising funding for medium and long-term capital costs for GCC issuers.

S&P: Arcapita Bank Long-Term Rating Lowered To 'BB'; Remains On CreditWatch Negative; 'B' Short-Term Affirmed

Press Release

PARIS April 6, 2009--Standard & Poor's Ratings Services said today that it lowered its long-term counterparty credit rating on Bahrain-based Arcapita Bank to 'BB' from 'BB+' and kept the rating on CreditWatch with negative implications where it was initially placed on Jan. 28, 2009. At the same time, Standard & Poor's affirmed its 'B' short-term rating on Arcapita.

"The rating action reflects the very weak investment climate, which has challenged Arcapita's business model and has decreased the value of its assets in our view," said Standard & Poor's credit analyst Mohamed Damak. "In this light, we believe Arcapita's leverage indicators have weakened, which has put pressure on its credit profile."

Arcapita has reported that it is implementing a set of measures to reduce its leverage and improve its liquidity position. It has already:

--Raised $300 million through two-year facilities from strategic investors;

--Raised $100 million of capital from a strategic shareholder in the Gulf; and

--Sold and leased-back its head office and a related piece of land in a $400 million transaction.

Standard & Poor’s Ratings Address The Growing Takaful Market

Press Release

LONDON, March 30, 2009 -- In a report published today, Standard & Poor's Ratings Services explains the way that its rating approach has been adapted to meet the growth of takaful insurance.

The article, "Standard & Poor's Approach To Rating Takaful And Retakaful (Islamic Re/Insurance) Companies," says that the last five years have seen takaful (Islamic insurance) grow from a niche product servicing relatively limited demand to become a mainstream risk management offering.

"In particular, we have seen rapid growth in the Arab world and an expansion across Europe. A further market development has been the growth of retakaful as a Sharia-compliant version of reinsurance," said Standard & Poor's credit analyst Kevin Willis.

Standard & Poor's has rated a number of Islamic insurers and reinsurers and so is able to comment on the way that the rating criteria have been adapted to address the specifics of this product.

Dubai Islamic Insurance & Reinsurance Co. (Aman) Outlook Revised To Negative; 'BBB' Ratings Affirmed

Press Release

PARIS (Standard & Poor's) March 9, 2009--Standard & Poor's Ratings Services said today that it revised its outlook on Dubai-based insurer Dubai Islamic Insurance & Reinsurance Co. (Aman) to negative from stable. At the same time, we affirmed the 'BBB' long-term counterparty credit and insurer financial strength ratings on Aman.

"The outlook revision reflects the increasing pressure on Aman's risk-adjusted capital adequacy, arising mainly from the continuing decline in investment markets in the Gulf region," said Standard & Poor's credit analyst Lotfi Elbarhdadi.

S&P: Rated Gulf Islamic Banks And Takaful Companies Resilient In Global Market Dislocation But Facing Risks

Press Release

PARIS, February 27, 2009--Gulf Islamic financial institutions and takaful companies are feeling the repercussions of the current global financial market disruption less than most of their conventional counterparts because Sharia law prohibits interest-based financial products, according to a new report by Standard & Poor's Ratings Services.

"IFIs didn't invest in the structured products that have hampered many conventional banks' financial profiles and performance," said Standard & Poor's credit analyst Mohamed Damak in the report, titled Rated Gulf Islamic Financial Institutions And Takaful Companies Have Shown Resilience To Global Market Dislocation, But They Are Not Risk Immune. "And most IFIs should be equipped to weather the financial downturn and keep the effects on their financial profiles at manageable levels."

Sukuk Issuance Fell Dramatically In 2008 But Long-Term Market Prospects Are Good, Says S&P

Press Release

PARIS, January 14, 2009--Despite a dramatic decline in volumes in 2008, the long-term perspectives for global sukuk issuance are still good, said Standard & Poor's Ratings Services in a report published today "Sukuk Market Declined Sharply In 2008, But Long-Term Prospects Remain Strong."

"The decline in sukuk issuance in 2008 was as a result of global market turmoil, drying up of liquidity, widening of credit spreads, and investors' wait-and-see attitude," said Standard & Poor's credit analyst Mohamed Damak. "Although difficult to measure, part of this decline could also have been due to comments about the Sharia compliance of some sukuk by the Accounting and Auditing Organization for Islamic Financial Institutions.

More than 45% of sukuk issued in 2008 were "ijara" (lease financing), most probably as a direct consequence of the debate about Sharia compliance among some scholars. The value of sukuk issued in 2008 dropped by more than 56% compared with 2007, to $14.9 billion. "We do not expect the market to start reviving before the second half of 2009 or early 2010," added Mr. Damak.

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