Paris/London: Fitch Ratings has assigned Bahrain Mumtalakat Holding Company’s (BBB/Stable) upcoming trust certificate programme (Sukuk) and euro medium term note programme (EMTN) a ‘BBB (EXP)’ expected rating. The rating is in line with Mumtalakat’s long-term Issuer Default Rating (IDR) and senior unsecured rating.
The final rating is contingent upon the receipt of final documentation conforming materially to information already received and details regarding the Sukuk and bond programme amount. Fitch understands that the proceeds will predominantly be used to refinance upcoming maturities, in particular those in 2015 (BD283m). Moreover, Fitch understands that there is no material secured debt within the group other than at Gulf Air (BD97m).
The certificate programme’s expected rating is driven by Mumtalakat’s IDR and senior unsecured rating of ‘BBB’, due to the Sukuk’s structure, which includes the following features:
– Mumtalakat’s undertaking to purchase the share interests relating to the share portfolio from the trustee on the scheduled or any earlier dissolution dates.
– The dissolution distribution amount payable by Mumtalakat will be the total of the outstanding face amount of the certificates and any accrued but unpaid periodic distributions. – On any periodical distribution date, if the wakala portfolio revenues are insufficient to cover the periodical distribution payment, Mumtalakat (the service agent) will apply credit towards the shortfall by paying the same amount into the transaction account.
– The payment obligations under the documentation will be direct, unconditional, unsecured and will rank at least parri passu with Mumtalakat’s other unsecured unsubordinated obligations.
The programmes include a negative pledge provision binding Mumtalakat, as well as financial reporting obligations, and cross-default clauses. The notes issued under the EMTN programme will also be unsubordinated unsecured obligations of Mumtalakat.
By assigning ratings to the programme and certificates to be issued under it, Fitch does not express an opinion on the programme structure’s compliance with Shariah principles or whether the relevant transaction documents are enforceable under any applicable law.