Islamic Finance 

Moody’s upgrades AHB Sukuk Company Ltd.’s sukuk programme to (P)A1 and its USD500 million senior note to A1 following guarantee by Abu Dhabi Commercial Bank

| 03 July, 2019

Limassol, July 02, 2019 -- Moody's Investors Service ("Moody's") today upgraded to (P)A1 from (P)A2 the provisional foreign currency senior unsecured MTN rating of AHB Sukuk Company Ltd., a special-purpose vehicle established in the Cayman Islands by Al Hilal Bank PJSC (Al Hilal Bank, issuer rating A2 stable, baseline credit assessment or BCA of ba3, adjusted BCA of ba1). Moody's also upgraded to A1 from A2 the backed senior unsecured rating on AHB Sukuk Company Ltd.'s outstanding USD500 million senior unsecured note due 19 September 2023. The outlook on AHB Sukuk Company Ltd.'s senior unsecured note remains stable.

A full list of affected ratings can be found at the end of this press release.

RATINGS RATIONALE

The upgrades are driven by the issuance on 2 July 2019 by Abu Dhabi Commercial Bank (ADCB; long-term deposit rating A1 stable, BCA of baa3) of a guarantee covering AHB Sukuk Company Ltd.'s sukuk programme and its
USD500 million senior note, and follows ADCB's acquisition of Al Hilal Bank on 1 May 2019.

Both the provisional senior unsecured MTN (foreign currency) rating and the rating on the USD500 million senior unsecured note due 19 September 2023 are now aligned with the long-term deposit ratings of ADCB. The outlook on the senior unsecured note is stable, and aligned with the stable outlook on ADCB's long-term deposit ratings.

These upgrades reflect Moody's view that the guarantee provided by ADCB meets the key elements of credit substitution according to Moody's rating methodology "Rating Transactions Based on the Credit Substitution
Approach: Letter of Credit-backed, Insured and Guaranteed Debts" published in May 2017.

ADCB's guarantee is irrevocable and unconditional, and covers full and timely payment of the underlying obligation.

ADCB, established in 1985 in Abu Dhabi, is a United Arab Emirates (UAE)-based bank with reported total assets of $76 billion and a market share of 10% in terms of total assets at 31 December 2018, before the completion of the aforementioned merger.

Al Hilal Bank, established in 2007 in Abu Dhabi, is a UAE-based bank with reported total assets of $11.9 billion and a market share of 1.6% in terms of total assets at 31 December 2018.

OUTLOOK

The stable outlook on the outstanding backed senior unsecured note is aligned with the stable outlook on ADCB's long-term ratings.

WHAT COULD MOVE THE RATINGS UP/DOWN

The rating of AHB Sukuk Company Ltd.'s provisional senior unsecured MTN (foreign currency) rating will move in line with ADCB's ratings.

The rating and outlook of AHB Sukuk Company Ltd.'s outstanding USD500 million senior unsecured note due 19 September 2023 will move in line with ADCB's ratings.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Banks published in August 2018. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

The local market analyst for these ratings is Mik Kabeya, +971 (423) 795-90.

FULL LIST OF AFFECTED RATINGS

Issuer: AHB Sukuk Company Ltd.

..Upgrades:

....Senior Unsecured Medium-Term Note Program, Upgraded to (P)A1 from
(P)A2

....Backed Senior Unsecured Regular Bond/Debenture, Upgraded to A1 from A2, Outlook Remains Stable

..Outlook Action:

....Outlook Remains Stable

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity.

Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Constantinos Kypreos
Senior Vice President
Financial Institutions Group
Moody's Investors Service Cyprus Ltd.
Porto Bello Building
1, Siafi Street, 3042 Limassol
PO Box 53205
Limassol CY 3301
Cyprus
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

Sean Marion
MD - Financial Institutions
Financial Institutions Group
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

Releasing Office:
Moody's Investors Service Cyprus Ltd.
Porto Bello Building
1, Siafi Street, 3042 Limassol
PO Box 53205
Limassol CY 3301
Cyprus
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

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