Fitch Assigns Dubai bank $5bn trust certificates issuance programme 'A'

Dubai Bank's ratings are Long-term Issuer Default rating (IDR) 'A' with a Stable Outlook, Short-term IDR 'F1', Individual 'C/D', Support '1' and Support Rating Floor 'A'.

Fitch emphasises that the above rating is for the programme and each individual issue under the programme may not necessarily carry the applicable programme rating. Ratings for individual issues will be assigned on a case-by-case basis subject to the terms and conditions of each issue.

The programme involves the sale of Shari'ah-compliant assets by Dubai Bank to DB Sukuk Company Ltd (DBSC), which then issues trust certificates and makes periodic distributions to certificate holders from income generated by the assets.

DBSC is an exempted company with limited liability incorporated in the Cayman Islands whose sole purpose is to participate in these transactions. Under the structure, Dubai Bank is required to ensure provision of sufficient funds to satisfy any outstanding periodic distributions for the certificates in full plus the dissolution distribution amount upon maturity, including in the case of a dissolution event (event of default).

The rating reflects Fitch's judgement that the obligations of Dubai Bank with respect to trust certificates issued under this programme can be considered as unconditional, unsubordinated and general obligations of Dubai Bank, ranking pari passu with its other senior unsecured obligations. The programme's rating is therefore in line with Dubai Bank's Long-term IDR.

Dubai Bank is 70% owned by Dubai Holding, which is effectively wholly-owned by the ruler of Dubai; 30% is owned by Emaar, the largest Middle East property developer, which in turn is 32% owned by the government of Dubai. Activities include corporate and retail banking, and treasury. Dubai Bank had around 0.9% of UAE banking system assets at end-2007.