OREANDA-NEWS. Fitch Ratings has assigned Noor Sukuk Company Ltd.'s (Noor Sukuk) new trust certificate issuance programme an expected senior unsecured rating of 'A-(EXP)'. A full list of rating actions is available at the end of this rating action commentary.

The sukuk will be issued under Noor Sukuk's trust certificate issuance programme under which total issuance may be up to a maximum USD3bn equivalent. The final rating is contingent on the receipt of final documents conforming to the information already received.

Noor Sukuk, a legal entity incorporated in the Cayman Islands, is set up solely to act as the issuer of the certificates and trustee for the certificate holders.

KEY RATING DRIVERS
The trust certificate issuance programme's expected rating is driven by Noor Bank PJSC's (Noor Bank) Long-term Issuer Default Rating of 'A-', reflecting Fitch's view that default of these senior unsecured obligations would reflect default of the entity in accordance with Fitch's rating definitions. The rating also takes into account the sukuk's structure and documentation, which includes the following features:

-On the scheduled dissolution (or following the occurrence of a dissolution event), the trustee or the delegate will have the right under the purchase undertaking to require Noor Bank to purchase all of the trustee's rights, title, interests, benefits and entitlements in, to and under the wakala assets, comprising the wakala portfolio for payment of the relevant exercise price

-The dissolution amount will be equal to the aggregate outstanding face value of the certificates plus all accrued and unpaid periodic distribution amounts (if any) relating to the certificates

-On the business day prior to each periodic distribution date Noor Bank will pay amounts (but no more than the relevant periodic distribution amount) reflecting the returns generated in respect of the relevant wakala portfolio (including any amounts advanced under the liquidity facility to be advanced to Noor Bank) into the relevant transaction account. The amount is intended to be sufficient to fund the periodic distribution amounts payable by the trustee under the certificates of the relevant series

-The payment obligations of Noor Bank under the purchase undertaking, the lease agreement and service agency agreement will constitute direct, unconditional, unsecured and general obligations of Noor Bank, which rank at least pari passu with all other unsecured, unsubordinated monetary obligations of the bank, present and future.

The programme includes a negative pledge provision binding Noor Bank, as well as financial reporting obligations, covenants and default acceleration clauses. The documentation does not contain a change of control clause.

The master trust deed, supplemental trust deed, the agency agreement, the programme agreement, any subscription agreement, the service agency agreement, the sale undertaking, the purchase undertaking and any non-contractual obligations arising out of it will be governed by English law. The master lease agreement and any supplemental lease contract, the master purchase agreement and any supplemental purchase contract and any sale and/or transfer agreement entered into pursuant to the purchase undertaking or the sale undertaking, will be governed by, and construed in accordance with, the laws of the Emirate of Dubai and, to the extent applicable in Dubai, the federal laws of the United Arab Emirates.

The corporate services agreement and the registered office will be governed by the laws of the Cayman Islands. Fitch does not express an opinion on whether the relevant transaction documents are enforceable under any applicable law. However, Fitch considers Noor Bank's intention to support Noor Sukuk and its obligations; hence Fitch's rating for the certificates therefore reflects the agency's belief that Noor Bank would stand behind their respective obligations under the documentation.

Furthermore, by assigning ratings to the programme and certificates to be issued under it, Fitch does not express an opinion on the programme structure's compliance with Sharia principles. There is no assurance that notes issued in the future 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 programme rating.

RATING SENSITIVITIES
The ratings are sensitive to a change in Noor Bank's Long-term IDR. This in turn is sensitive to a reduction in the perceived ability or willingness of the authorities to provide support to the bank. Given the robust economy, the authorities' strong track record of support for local banks and no plans for resolution legislation at this stage, downward pressure is considered low.

RATING ACTION
New rating:
Noor Sukuk Company Ltd.'s Trust Certificate Issuance Programme assigned at 'A-(EXP)'

Noor Bank's ratings are as follows:
Long-term foreign currency IDR: 'A-'; Outlook Stable
Short-term foreign currency IDR: 'F2'
Viability Rating: 'b+'
Support Rating: '1'
Support Rating Floor: 'A-'.