Aldar Properties PJSC Moody's assigns (P)A3 rating to Aldar's proposed AED Sukuk

The outlook is stable.

The rating action follow Moody's announcement on April 17, 2008, that Aldar had been assigned long term foreign and local currency issuer ratings of A3 with a stable outlook.

Accordingly, Moody's regards Sukuk Al-
Ijara as senior unsecured obligations.

The rating is provisional, subject to receipt of the final Offering Circular, underlying agreements and legal opinions related to the Purchase Undertaking, the Purchase Agreement, the Sale Undertaking, the Costs Undertaking, the Ijara Agreement and the Declaration of Trust, all of which constitute vital legal documents in the creation of the structure.

Under the proposed structure Sukuk Funding (No. 2) Limited, Jersey (SFL) issues the sukuk and uses the proceeds to buy from Aldar assets, primarily consisting of a 50-year headlease (musataha) on a plot of land.

Sukuk holders will have no recourse (to the land) other than to the assets of SFL.

The value of the assets Aldar will equal that of the issuing price of the sukuk.

Aldar will enter into a lease agreement with SFL, whereby SFL will receive from Aldar regular rental payments equal to the return due under the sukuk.

Payment obligations of Aldar will be direct, unconditional, unsecured and general obligations of Aldar and rank at least pari passu with all other unsecured, unsubordinated and general obligations of Aldar.

At maturity or upon a dissolution event, Aldar is required by means of a purchase undertaking to fully repay -- including any unpaid and accrued periodic distribution amount -- the sukuk, thus investors are of a senior unsecured nature.

While the Declaration of Trust, the Agency Agreement, the Servicing Agency Agreement, the Substitution Undertaking, the Purchase Undertaking, the Sale Undertaking, the Costs Undertaking and the Certificates will be governed by English law and subject to the jurisdiction of the English courts, the Ijara Agreement and the Purchase Agreement will be governed by the laws of the Emirate of Abu Dhabi and, to the extent applicable in Abu Dhabi, the federal laws of the UAE and subject to the jurisdiction of the Abu Dhabi courts.

While Moody's does not opine on the transaction's compliance with Shari'ah 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.

Aldar Properties PJSC is the leading property developer in Abu Dhabi in terms of its projects and the size of its land bank.

The company is currently developing an area around one-third the size of Abu Dhabi City, which is the capital of the UAE.

Aldar owns around 34 million square meters of land, comprising freehold and leasehold land at key strategic locations across Abu Dhabi.

Sukuk Funding (No. 2) Limited, headquarted in Jersey, is a special purpose vehicle set up for the sole purpose of issuing Sukuk Al-Ijara under the above structure.