Moody's assigns (P)A1 ratings to Jebel Ali's proposed GMTN Programme and Sukuk

The outlook is stable. Moody's has also assigned a (P)A1 rating to the proposed Sukuk al-Musharaka transaction to be issued by JAFZ Sukuk Limited (JSL). The outlook is also stable.

The rating actions follow Moody's recent announcement that JAFZ had been assigned long term foreign and local currency issuer ratings of A1 with a stable outlook. Accordingly, Moody's regards both the GMTN Programme and
the al-Musharaka Sukuk as senior unsecured obligations. Both ratings are provisional, in the case of the GMTN Programme subject to receipt of the final Offering Circular, and in the case of the Sukuk subject to receipt of the final Offering Circular, underlying agreements and legal opinions related to the Purchase Undertaking, the Sale Undertaking, the Musharaka Agreement and the Declaration of Trust, all of which constitute vital legal documents in the creation of the Musharaka structure.

According to the terms of the Sukuk, JAFZ as the ultimate Obligor will issue the securities through JSL. When the transaction completes, the
certificate holders will pay the proceeds of the transaction to JSL, which will form the capital of a trust known as the Musharaka, pursuant to the Musharaka Agreement. The trust will contain Trust Assets, which include the capital of the trust as well as certain rights over land and
buildings. The agreement stipulates that Jafz will invest the capital in accordance with a Business Plan that provides that investments will be Sharia'ah compliant. The Business Plan is understood to essentially constitute the development of the free zone's southern expansion, linking it with the Dubai World Central complex.

Certificate holders will earn a pre-determined profit percentage (Periodic Distribution Amount) from their participation in the Musharaka Assets. Where the return is higher than determined, the excess profit is retained by JAFZ, not the issuer. Where the return is lower, JAFZ attains an obligation to ensure that any shortfall is met.

JAFZ (as Obligor), the issuer as Trustee and Deutsche Bank as Transaction Administrator enter into a Declaration of Trust, under which the issuer declares a Trust over its beneficial interest in the Musharaka Assets for benefit of certificate holders. These constitute the issuer's beneficial rights, title, interest etc in, to and under the Musharaka Assets and each of the transaction documents (the Musharaka, Agreement, the Purchase Undertaking, the Sale Undertaking, the Declaration of Trust, the Agency Agreement, and the Certificate Purchase Agreement). The Declaration of Trust is governed by English Law.

Each certificate thus represents beneficial ownership in the Trust Assets held on trust by the issuer, and will rank pari passu with other certificates. Certificate holders have no recourse for the payment of any outstanding amount in respect of the Certificates against the issuer or the Obligor, provided each fulfils all of its obligations under the relevant transaction documents. Moody's adds that Certificate holders also do not have security or any preferential claim over any of the Trust
Assets or other assets.

Either at the pre-determined Dissolution Date of the Trust, or under an early Dissolution Event (such as standard Events of Default, but also a
Change of Control defined as the government reducing its stake to below 50%), the issuer has the right to require the Obligor (JAFZ) to purchase the Issuer's beneficial interest in the Musharaka Assets, and all rights, benefits and entitlements under these Assets at the Relevant Exercise Price, which is fixed at the level of the proceeds from the Certificates.

This effectively unwinds the Trust and places the obligation to repay the certificate holders firmly in the court of JAFZ, thus enforcing the
senior unsecured nature of the transaction.

All legal documents, including the Purchase Undertaking and Declaration of Trust, are governed by English Law. Both the GMTN Programme and the Sukuk contain a Change of Control Clause which allows for early redemption in the event that the government reduces its stake in Jafz from currently 100% to below 50%.

While Moody's does not opine on the transaction's compliance with Shari'ah
or any other governing law, it notes that it expects a recognised Shari'ah Board to examine the structure and pronounce that the structure and mechanism of the transaction are acceptable within the principles of Shari'ah prior to closing.

Jebel Ali Free Zone FZE (JAFZ) is one of the world's largest free zones, based in Dubai, United Arab Emirates. The Jebel Ali Free Zone is located adjacent to Dubai's main Jebel Ali Port and incorporates a 48 square kilometre commercial and industrial hub, which is home to over 5,500 companies from 110 countries, including warehouses, offices and other
ready-built facilities. At year-end 2006, JAFZ had Dhs738m ($201m) in revenues.

JAFZA Sukuk Limited (JSL), headquartered in the Cayman Island, is a Special Purpose Company set up for the sole purpose of issuing al-Musharaka Sukuk under the above structure.