Fitch rates QIIB's trust certificate issue A-(EXP)

The final rating is contingent on the final documentation conforming to information already received.

QSF is a special purpose vehicle (SPV), incorporated in the Cayman Islands solely to act as the issuer of the certificates (Sukuk) and trustee for the certificate holders.

Fitch has aligned the issue rating with QIIB's Long-term Issuer Default Rating (IDR) as the Sukuk structure is viewed as an originator-backed/asset-based structure. The certificates' ratings would therefore be sensitive and directly-linked to any change in QIIB's Long-term IDR.

The originator backing is based on: i) QIIB's payment and performance obligations under the Sukuk transaction documents ranking pari passu with QIIB's other senior unsecured debt obligations; ii) QIIB's irrevocable undertaking to purchase the relevant wakala assets from QSF and to liquidate the relevant mudaraba assets on the scheduled or any earlier dissolution dates; and iii) On any periodic distribution date, if the returns generated from the Sukuk assets are insufficient to cover the periodic distribution payments due, QIIB may pay further amounts to the SPV to remedy such shortfall via a liquidity facility. Fitch views the provision of a liquidity facility as an obligation of QIIB as failure to provide liquidity if required would lead to a payment default under the certificates and in the agency's view that this would also constitute an event of default for QIIB.

Fitch understands that certificate holders have a beneficial interest in the cash flows generated by the underlying assets, but do not have recourse to those assets, as such the Sukuk is asset-based not asset-backed.

By assigning a rating to the issue, Fitch does not express an opinion on the Sukuk structure's compliance with Shariah principles or whether the relevant transaction documents are enforceable under any applicable law, including, without limitation, Qatar law.

Established in 1991, QIIB is fast growing full service Islamic bank with around 3% market share by banking assets at end-2011. The Qatar government (via the Qatar Investment Authority) holds a 16.7% stake in the bank. Its largest shareholder is a prominent business family with a combined holding of 22.6%.