Moody's rates Abu Dhabi Islamic Bank's Trust Certificate Issuance Programme

The sukuk trust certificates will be issued under a USD5 billion Trust Certificate Issuance Programme. Moody's has assigned A2 and A3 ratings for senior sukuk and subordinated sukuk trust certificates, respectively, that could be issued under the programme.

Moody's says that the ratings assigned are subject to review of the final documentation, the terms and conditions of which are not expected to change in any material way from the draft documents reviewed.

Accordingly, a special purpose entity (issuer), ADIB Sukuk Company Ltd, incorporated in the Cayman Islands, will issue sukuk certificates to
investors (sukukholders) and will use the proceeds to acquire a co-ownership interest in a portfolio of assets comprising "Ijara" (lease)
contracts from ADIB, with the two parties becoming co-owners in the co-ownership assets (Trust assets). ADIB, as managing agent, will collect all rental payments from the leased contracts in the trust assets and will pay the issuer an amount sufficient to fund the periodic
distribution amount to sukukholders on each distribution date. ADIB will issue a purchase undertaking in favour of the issuer, wherein it
undertakes to purchase the issuer's interest in the co-ownership assets at a pre-agreed price, either upon maturity date or prior to maturity due to a dissolution event.

The A2 rating that Moody's has assigned to the floating rate senior sukuk is at the same level as the long-term foreign currency issuer rating
already assigned to ADIB, the obligor, given that ADIB is (a) obliged to cover any shortfall between the rental payments from the co-owned assets and the required periodic distribution amount to sukukholders; and (b) it has irrevocably undertaken to purchase the issuer's interest in the co-ownership assets at the exercise price sufficient to pay the sukukholders, either at maturity or on dissolution. Given that the obligations of ADIB will be direct, unconditional and unsecured
obligations and will rank at least pari passu with other unsecured and unsubordinated obligations, the senior sukuk rating is placed at the same level as ADIB's long-term foreign currency issuer rating.

ADIB's foreign currency issuer ratings are set at A2/Prime-1 largely based on Moody's imputing a strong likelihood of external support from
the UAE authorities and ADIB's main shareholders in case of need. Although, on a stand-alone basis, ADIB's foreign currency issuer rating
would be rated much lower given the bank's modest intrinsic strength as reflected in the D Financial Strength Rating, Moody's says that these ratings are lifted to A2/Prime-1, reflecting ADIB's strong relationship with the Abu Dhabi government -- including its 14.3% direct and indirect ownership -- and the standing and status of its other core shareholders (members of the UAE ruling family).

Headquartered in Abu Dhabi in the United Arab Emirates, Abu Dhabi Islamic Bank had total assets of AED29.6 billion (USD8.1 billion) in June 2006.