Sun is a Jersey incorporated company with limited liability. The transaction is a plot sales receivables financing company, under which Sun receives its cash flows from a property company, Sorouh Abu Dhabi Real Estate LLC (SADRE), domiciled in Abu Dhabi.

SADRE will deliver infrastructure for Shams Abu Dhabi, a 170 hectare development on Al Reem Island, and the Saraya development in Abu Dhabi central business district.

The project will develop only the infrastructure connecting to and not the buildings being built on the individual plots.

The certificates will be subject to some construction risk as sites must be fully connected to utility services and other defined infrastructure before the transfer of title to individual developers.

The receivables are liabilities of the various building developers, which will buy land from the property company, SADRE, on which they will construct their buildings.

The developers make payments in installments for the land during the term of the certificates, with the freehold ultimately transferred on payment of the final installment.

The developers can construct their projects on the plots of land during the period of payment, known as a Musataha, and be able to take deposits from potential leaseholders in the developments, in many cases ahead of and during construction.

Each developer will step into a sale and purchase agreement with SADRE, which will define the terms of the Mustaha, including the payments to be made, and when the freehold will be transferred to the developer. It also defines what happens if a developer defaults.

The quality of the payment flow and the recovery for the transaction hinge on the incentive for the developer to continue payment installments for the freehold.

The handover of the freehold can only be undertaken once all conditions have been met, including the completion of infrastructure works and connections.

The transaction includes an infrastructure fund of approximately AED1,731 million to construct the infrastructure and utility connections, which will be funded from the initial issuance.

The anticipated completion date for the infrastructure is June 30, 2010, although this can be extended for up to six months without penalty, which is supportive to the transaction.

Shams Abu Dhabi, although a large development in its own right, is a relatively small part of the overall development of Abu Dhabi envisaged in the 'Plan Abu Dhabi 2030'.

This plan sets out the development of the islands and other undeveloped areas in the Emirate to improve the quality of properties, increase the number of dwellings and commercial properties, and significantly increase the tourist attractions and hotel capacity.

Properties in Abu Dhabi are of a relatively low standard compared with neighboring Dubai, and many Abu Dhabi workers commute from Dubai because of this.

The transaction will be a Sukuk certificate issuance, which is underpinned by a structure based on Islamic Law.

The Sukuk issuance will fund the purchase of assets from Sorouh PJSC ('Mudaraba' assets), which will be owned by SADRE, the 'Mudareb', and which will also be used to finance the infrastructure fund for construction plus the transaction's liquidity, including a senior expenses fund.

The Mudaraba will be constructively dissolved monthly enabling the ongoing declaration of profits and the return of capital to Sun, known as the 'Rabb-ul-Maal'.

Sun also has an additional 'Masawama' agreement, which provides an acceptable structure for the prioritization of the notes under Shariah law, resulting in different classes of certificate to be issued.

Our preliminary ratings address the timely payment of profit and the ultimate recovery of capital.