Moody's updates on Tamweel Residential ABS CI (1) Sukuk, UAE RMBS transaction

Current Sukuk Ratings

- Aa2 to the Class A Floating Rate Secured Notes due 2037.
- Baa1 to the Class B Floating Rate Secured Notes due 2037.
- Ba3 to the Class C Floating Rate Secured Notes due 2037.

Moody's did not assign ratings to the Class D Floating Rate Secured Notes due 2037.

Tamweel PJSC rating actions and ongoing uncertainty

On August 6th 2009 Moody's lowered Tamweel's ratings to Baa1/P-2 on review with direction uncertain reflecting the continued stressed environment and lack of information regarding the institution's future. Tamweel maintains a key role in servicing the ijarah portfolio on behalf of sukuk investors and was a potential 'weak link' for the rating. This 'weak-link' however was mitigated at closing by the appointment of ENSEC Servicing LLC ("ENSEC") as Standby Servicer (unrated) and Dubai Islamic Bank ("DIB") as secondary Standby Servicer. DIB is currently rated A1/P-1 on watch for downgrade. In the event of a Tamweel insolvency, the Standby Servicer will step in to manage the sukuk assets on behalf of the investors.

Resignation of Standby Servicer ENSEC Servicing LLC

Unrelated to the above events, ENSEC notified the Trustee on 2nd June 2009 it was resigning from its role with 90 days notice in accordance with the transaction documentation. As such DIB had confirmed that will assume the Standby Servicing responsibilities going forward as of 1st September 2009. Following a preliminary review of DIB's standby servicing operations, Moody's is satisfied with the transition and notes that presence of a relatively strong and rated Standby Servicer continues to support the current senior sukuk ratings and as such, the assigned ratings remain unchanged and stable.

Asset Backed Sukuk performing well despite housing market stress

The credit risk of this true, Asset 'Backed' sukuk, is driven primarily by the credit risk of the underlying assets (properties and associated Ijara lease contracts in Dubai) which have been 'sold' to investors and not the credit risk of Tamweel PJSC ("Tamweel") itself. Despite the stressed economic environment in the UAE this well seasoned ijarah portfolio is performing well with 0.00% defaults since issuance and 0.25% of 60+ day delinquencies as of August 2009. Please note there are no 'forward ijarah' contracts amongst the sukuk assets.

Tamweel's Asset 'Based' (unsecured) sukuk is not legally 'backed' by assets, hence this rating is driven directly by the strength/weakness of Tamweel PJSC - not the assets. This sukuk also was downgraded on 6th August 2009 in line with the Originator.

Today's update relates to these events only and should not be taken to imply that Moody's will not take a rating action in respect of the securities by virtue of any other events or circumstances that may be occurring now or that occur in the future. There has been no rating action on the sukuk certificates since the initial rating assignment in June 2007.

Moody's monitors this transaction using the rating methodology described in the reports: "Moody's Approach to Rating RMBS in Emerging Securitisation Markets -- EMEA" dated 8 June 2007, "Cash Flow Analysis in EMEA RMBS: Testing Structural Features with the MARCO Model", published in January 2006 and "Moody's Methodology for Rating RMBS in Europe, Middle East and Africa (EMEA)" dated 14 October 2008 which can be found at Moody's website under the Credit Index category of Structured Finance research. Other methodologies and factors that may have been considered in the process of rating this issue can also be found in the Credit Policy & Methodologies directory.In addition, Moody's publishes a weekly summary of structured finance credit, ratings and methodologies, available to all registered users of our web site.