S&P: Sharjah Sukuk notes A

Standard & Poor’s said it assigned a preliminary A rating to the proposed sukuk trust certificates to be issued by Sharjah Sukuk 2 Ltd.

Sharjah Sukuk 2 is a trustee incorporated in the Cayman Islands, wholly owned by the Emirate of Sharjah, which will enter into a leasing and purchase undertaking agreement with the emirate, S&P said.

Under the leasing agreement, the sukuk’s underlying assets will be leased to the government of Sharjah at a pre-determined rent calibrated to match the periodic distribution amount on the sukuk and any other costs related to the transaction.

These obligations are unconditional and will rank pari passu with Sharjah’s other financial obligations, the agency said.

The preliminary rating reflects the rating on Sharjah as the transaction fulfills the five conditions for rating sukuk, S&P said.

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