Fitch Ratings

Fitch affirms Dubai Islamic Bank at 'A'

Fitch Ratings has affirmed Dubai Islamic Bank’s (DIB) Long-term Issuer Default Rating (IDR) at ‘A’. This is due to the bank’s systemic importance and the Dubai government’s 30 per cent stake. Hence, there is a high probability of support from UAE authorities if needed. The bank’s Viability Rating (VR) at ‘bb’ reflects the domestic operating environment and DIB’s asset quality among others. The Long-term IDR is expected to be stable.

Sukuk rating now mandatory only in M'sia, but expected to grow with sukuk growth

According to Fitch Ratings, the growth of sukuk issuance in 2013 will be ensured by strong demand, mainly in originator-backed (asset-based) sukuk structures. Expectations for 2012 global sukuk issuances are for them to reach USD121b. This is an increase of 62% compared to the USD84.4bn the year before. At the moment Malaysia is the only country where sukuk rating is mandatory. The rating is considered to play a significant part in improving the confidence in this growing instrument.

Alinma Bank outlook ‘stable’

Alinma Bank has been assigned a long-term issuer default rating (IDR) of ‘A-’ with a stable outlook, a short-term IDR of ‘F2’, a viability rating (VR) of ‘bbb-’, a support rating of ‘1’ and a support rating floor of ‘A-’ by Fitch Ratings. The bank's IDRs, support rating and support rating floor reflect the view of the rating agency that if needed, support from the Saudi authorities is extremely probable.

World's first Basel III Tier 1 Sukuk may boost supply - Fitch

Fitch Ratings claims that after Abu Dhabi Islamic Bank's (ADIB) hybrid Tier 1 Sukuk further UAE banks are likely to follow their example and issue Basel III-compliant bonds. Both conventional and Shari’ah-compliant banks are expected to issue Tier 1 products in the coming year. Fitch also noted that relatively high levels of capital are a necessity for banks in the Gulf region in order to deal with the difficulties in the operating environment. Moreover, hybrid Tier 1 instruments are believed to be a cost-effective means of accessing a wider investor base.

Fitch rates Indonesia's PPSI-III Sukuk 'BBB-(EXP)'

In a statement, Fitch Ratings announced that it assigned the upcoming USD3bn Perusahaan Penerbit SBSN Indonesia III's (PPSI-III) global certificates (Sukuk), due 2022, a rating of 'BBB-(EXP)'. This rating is in accordance with the expectations. Thus, Fitch's view that the cashflows supporting payment on the Sukuk constitute direct, unconditional, unsecured and general obligations of the Republic of Indonesia are confirmed.

Fitch downgrades Kuwait Finance House’s Viability Rating to 'bb'

The Viability Rating of Kuwait Finance House has been downgraded to 'bb' by Fitch Ratings. The bank's Long-term Issuer Default Rating, however, remains at 'A+'. According to Fitch Ratings, the decrease in the VR is caused by he high concentrations in KFH's financing portfolio as well as asset quality indicators which continuously become worse. In addition, the bank reported slightly weaker regulatory Tier 1 and Fitch Core Capital ratios in H112. A positive move on KFH's side is expected: they plan to bolster their capital in the months to follow.

TEXT-Fitch:Planned sharia rules to aid asset quality in Indonesia

According to a statement by Fitch Ratings, Indonesia's consumer finance will probably see an improvement in the underwriting quality and regulatory consistency. The precondition is that Bank Indonesia harmonises prudential rules for sharia-compliant products with the ones for mainstream consumer loan products. Applying tougher loan to value (LTV) regulations to sharia products would make the competition with non-sharia products even. Moreover, asset quality diverging within the consumer finance sector would be prevented.

Indonesia Debt Drops Most in 8 Months on Fuel: Islamic Finance

Indonesian two-year sukuk dropped last month, raising up yields by the most since September, as Standard & Poor's.
S&P didn’t associate with Moody’s Investors Service and Fitch Ratings, which have allowed Indonesia investment-grade status in the past five months, declaring the nation at risk from “policy slippages” such as the failure to reduce the fuel subsidies.

Fitch affirms Al Rajhi at 'A+'; Outlook Stable

Fitch Ratings has put Al Rajhi Bank's Long-term Issuer Default Rating (IDR) at 'A+' with a Stable Outlook and its Viability Rating at 'a'.
The affirmation of the Viability Rating shows Al Rajhi's strong profitability, stable asset quality and large retail deposit base, whilst also taking into account some name concentration within the corporate loan portfolio in line with other Saudi banks.

Fitch affirms IDB’s rating

Fitch Ratings has just confirmed the IDB’s Long-term Issuer Default Rating at ‘AAA’ with a Stable Outlook and Short-term IDR at ‘F1+’. Mostly the excellent rating shows the risk level of the Shari’ah compliant work that IDB does and its lack of exposure to collapsing asset classes around the world.
IDB’s capital is owned by 56 countries, which are all members of the Organisation of the Islamic Conference. The main shareholder is Saudi Arabia (‘AA-’/Stable), which owns 24.6% of callable capital.

Fitch launches new Islamic service

Fitch Ratings launched its new Islamic portal service. The ratings agency developed the new service developed to showcase Fitch's Islamic rating coverage and research content on a dedicated section of the global website. It couples ratings and research on both Islamic issuers and Islamic issuances in one place. Users accessing the Islamic finance pages can get a global view on the Islamic finance rating coverage by Fitch.
Although a demand has not yet been identified, if subscribers show interest the Islamic portal could be sold as a separate product in the future.

Fitch welcomes Inaugural Standards for Gulf Debt Issuers

Fitch Ratings states that the inaugural Standards for Gulf Debt Issuers published by The Gulf Bond and Sukuk Association represents a positive step towards increasing transparency and public disclosure to give investors a better understanding of risks and symmetric access to consistent information.
Inspite of this, their effectiveness will depend on greater clarity about the details of the announced initiative, as well as its full and timely implementation.

Fitch Assigns Bank Asya's Forthcoming Sukuk Issue 'B+(exp)' Expected Rating

Fitch Ratings has assigned Asya Katilim Bankasi A.S.'s (Asya) forthcoming sukuk issue a 'B+(exp)' expected rating, the expected rating being in line with Asya's Long-term foreign currency Issuer Default Rating (IDR).
According to the draft prospectus, a Cayman-based special purpose company (SPV) will launch certificates (or sukuk) and use the proceeds to buy from Asya, a portfolio of assets, and any subsequent replacing assets, consisting of obligations owed by Asya's customers. All assets will consist of interest-free finance transactions, taking the form of murabaha or lease financing.

Jordan Islamic Bank announces financial results for the third quarter of 2011

The profit for Jordan Islamic bank ( JIB) for ninth months ending on 30 /9/2011 reached about JD21.1m ($29.8m) compared to about JD20.7m ($29.2m) for the same period in the last year with an increase by 2%.
Fitch Ratings set the bank's credit rating at BB- with stable outlook which asserts the bank's strength , its intrinsic consistency, its strong Islamic banking franchise in Jordan especially in the retail segment, sound core profitability, stable funding base, strong liquidity and good level of risk management systems.

Fitch Rates Goldman's Sukuk Trust Certificate Program 'A+/F1+'; Rating Watch Negative

Fitch Ratings has given an 'A+/F1+' rating to the trust certificate program conceived by The Goldman Sachs Group, Inc. (Goldman) and placed the rating on Rating Watch Negative. This program was designed for the issuance of murabaha trust certificates.
These ratings are based entirely on the rating of parent guarantor Goldman. GSI is the purchaser of the commodities being sold by GSCL under a deferred payment arrangement.

No rating impact from updated rating Sukuk criteria

It appears that after the update of Rating Sukuk criteria by Fitch Ratings the changes are not significant and therefor it will have no impact on existing ratings. The report outlines Fitch's approach to rating Sukuk.
Fitch analyses the structure of the underlying transaction(s) to comprehend and analyze the contractual cash flows.
While the report focuses on Fitch's recent experience, Islamic finance is in continuing its evolution.

Fitch rates FGB Sukuk issuance 'A+'

Fitch Ratings has announced that it has assigned FGB Sukuk Company Limited's $3.5 billion Trust Certificate Issuance Programme a Long-term rating of 'A+'.
Fitch underlines the fact that the rating is for the programme and not to the trust certificates issued under the programme.

Fitch assigns $1.5 billion DP World Sukuk 'BBB-' rating

Fitch Ratings has given DP World Sukuk's existing $1.5 billion Sukuk issue of senior unsecured trust certificates a final long-term senior unsecured 'BBB-' rating. The certificates were launched on 2 July 2007 and are due in 2017. DP World acts as the obligor of the Sukuk certificates.
Moreover, DP World is possible to supplement any shortfall in the returns generated by the underlying assets in order to make periodic payments in full.

IDB rate of return triple that of Gulf bonds

The reason for the fact that rate of return on Islamic Development Bank’s Shariah-compliant bonds sold last month was triple that of Gulf sukuk is that investors looking to own the highest rated debt sold this year.
Islamic Development is rated AAA, the highest investment grade, at Moody’s Investors Service, Standard & Poor’s and Fitch Ratings.

Fitch downgrades Dubai Bank's Individual Rating to 'F'

Fitch Ratings has downgraded UAE-based Dubai Bank's Individual Rating to 'F' . After the intervention by the Government of Dubai, taking full control of the bank, and providing a significant capital injection, the bank has also been removed from Rating Watch Negative (RWN).
Fitch downgraded Dubai Bank's Individual Rating in March 2011 because of its weakening financial position.

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