Fitch Ratings says the consent solicitation launched by Noor Bank PJSC (A/Stable/WD) on 17 September 2020, requesting the approval by extraordinary resolution at a meeting of sukuk holders to the substitution of Dubai Islamic Bank PJSC (DIB; A/Stable/bb+) for Noor acting in all its capacities under the transaction documents in connection with the outstanding sukuk issuance by Noor Sukuk Company Limited issued under Noor’s programme and certain asset transfers from Noor to DIB and the waiver by sukuk holders of any dissolution event that may otherwise arise in connection with such asset transfers, will not change the ratings of Noor’s sukuk issuance programme, hosted by its special purpose vehicle Noor Sukuk Company Limited, and of the outstanding sukuk issuance (ISIN XS1803114831).
Fitch only rates Noor’s senior unsecured certificates.
If the required majority of sukuk holders, as defined under the terms of the Consent Solicitation Memorandum (CSM), is obtained by DIB at the end of the consent solicitation period (12 October 2020), and subject to certain other conditions, as set out in the CSM, the consent solicitation and Proposal will be implemented.
Upon the implementation of the Proposal, and, accordingly, the substitution of DIB for Noor acting in all its capacities under the transaction documents in connection with the outstanding sukuk issuance, the transaction documents governing Noor’s sukuk programme and any future issuances thereafter will remain unaffected.
Once the substitution has occurred, and the executed substitution documents have been shared with Fitch, the agency expects to affirm Noor’s sukuk issuance programme and the outstanding issuance ratings and withdraw the ratings of Noor.
If the required majority is not obtained at the end of the consent solicitation, Noor shall remain the obligor and retain its obligation under the sukuk transaction documents. Nevertheless, DIB will still have the possibility to transfer part of Noor’s assets, to an extent that would not trigger a dissolution event under the sukuk transaction documents.
Fitch will continue to closely monitor these developments and Noor’s programme and sukuk final ratings is contingent on the receipt of final documents conforming to information already reviewed.
The consent solicitation request follows the acquisition of Noor by DIB, which was completed on 22 January 2020.
Following the merger, the ratings of Noor and its underlying sukuk issuance programme and issues are aligned with DIB’s, based on institutional support as Fitch believes this would be the primary form of support for Noor, in case of need, as an integral and fully owned subsidiary of DIB.
Source FitchRatings