LONDON, August 28, 2009--Standard & poor's Ratings Services has affirmed its 'AAA' senior unsecured debt rating on the increased $1.5 billion Islamic trust certificate issuance program of IDB Trust Services Ltd., a specialp-urpose entity incorporated in Jersey that raises funds for Islamic Development Bank (IsDB; AAA/Stable/A-1+).
The rating on the program is equal to the issuer credit rating on IsDB. With each sukuk issuance under the program, IDB Trust Services Ltd. purchases a portfolio of sukuk assets from IsDB. The purchase price is funded by the sukuk proceeds.
The sukuk assets were originated and are serviced by IsDB. The profits generated on the sukuk assets are used to make periodic distribution payments on the notes. At maturity of the notes issued under the program, IsDB is obliged to purchase back from IDB Trust Services Ltd. the outstanding sukuk assets for an amount equal to the principal repayment together with any unpaid profits due to the noteholders.
In addition, IsDB grants a noninterest-bearing liquidity facility to IDB Trust Services Ltd., which can be drawn if the profits on the sukuk assets are insufficient to pay periodic distribution payments on the sukuk.
The equalization of the rating on the program, and notes issued hereunder, with the issuer credit rating on IsDB is based on our view that the full and timely payment of periodic distribution and principal on the sukuk ultimately depend on IDB Trust Service Ltd.'s recourse to IsDB's obligations under the program, including IsDB's obligation to provide the liquidity facility and to repurchase the sukuk assets.
- Ends -
Editor's notes
RELATED RESEARCH
presale: Islamic Development Bank Medium-Term Sukuk Note program, May 20, 2005.
Islamic Development Bank , Dec. 16, 2008.
Two Aspects Of Rating Sukuk: Sharia Compliance And Transaction Security, Jan. 12, 2006.
Glossary Of Islamic Finance Terms, Jan. 7, 2008
Standard & poor's Approach To Rating Sukuk, Sept. 7, 2007.
About Standard & poor's in the Gulf Cooperation Council
Standard & poor's is the leading provider of financial market intelligence to customers in the Gulf's credit risk management, wealth management, and data and information markets. Since entering the region in the early 1990's, Standard & poor's has become the largest provider of credit ratings in the G.C.C, rating 114 issuers. In equity markets, Shariah-compliant versions of Standard & poor's global and regional equity market indices - S&p 500, S&p Europe 350, S&p Japan 500 and S&p/IFCI GCC - have created new opportunities for Islamic investors to benchmark their international investments and for asset managers to create new investment products serving the Islamic community. Standard & poor's Fund Services launched a qualitative fund management rating service for regional asset managers in 2007. For further details on Standard & poor's regional capabilities please visit www.gcc.standardandpoors.com
Ratings information is available to RatingsDirect subscribers at www.ratingsdirect.com. It can also be found on Standard & poor's public Web site at www.standardandpoors.com; select your preferred country or region, then Ratings in the left navigation bar, followed by Find a Rating. Alternatively, call one of the following Standard & poor's numbers:
Client Support
Europe
Tel: (44) 20-7176-7176
London press Office
Tel:(44) 20-7176-3605
paris
Tel:(33) 1-4420-6708
Frankfurt
Tel:(49) 69-33-999-225
Stockholm
Tel:(46) 8-440-5914
Moscow
Tel:(7) 495-783-4011.
© press Release 2009
