Fitch affirms Tamweel; outlook stable

The rating actions follow a satisfactory review of the performance of this deal and are as follows:

Class A (ISIN XS0310218713): affirmed at 'AA'; Outlook Stable

Class B (ISIN XS0310219521): affirmed at 'BBB+'; Outlook Stable

Class C (ISIN XS0310219950): affirmed at 'BB-' (BB minus); Outlook Stable

The transaction is an atypical RMBS transaction. Instead of residential mortgage loans, the transaction involves residential leasees, which are in compliance with Shar'iah law.

The lease contracts are reset periodically, and carry fixed, variable and supplementary costs. The lessees also have the option of purchasing the property that is subject to leasing.

The securitisation is a true sale of assets, which requires registration of the leases with the land registry.

At the time of issuance, roughly 54% of the leases were registered, and the originator was given a deadline of end-December 2007 to complete the registration of the remaining part of the pool.

At January 2008, approximately 10% of the initial pool of leases remained were unregistered.

These unregistered leases were removed from the pool and the additional funds received from the issue of notes to cover these leases were used in January 2008 to redeem the notes.

The transaction benefits from a liquidity facility provided by Standard Chartered Bank, and an exchange agreement provided by Morgan Stanley & Co. International plc. As per the transaction terms a minimum yield is guaranteed on the pool.

As of February 2008, arrears equal to and greater than one month stood at 7% of the portfolio outstanding, while there were no leases in arrears by more than three months.

Fitch has employed its credit-cover multiple methodology in reviewing these transactions to assess the level of credit support available to each class of notes. Credit cover levels are influenced by a number of factors, such as delinquency levels, speed of note amortisation, reserve fund levels and the seasoning of the transaction.