"The Government of Sharjah's debut Sukuk offering reflects the growing interest in Islamic finance as a source of sovereign funding," commented
"Moody's A3 government bond rating and stable outlook on Sharjah is primarily supported by the emirate's very strong fiscal and government debt position, which benefits from the emirate's membership in the
The (P)A3 rating assigned to the Trust Certificates is at the same level as the long-term local-currency and foreign-currency issuer ratings of the Government of Sharjah, as the Sukuk certificate holders will (i) effectively be exposed to Sharjah's senior credit risk; (ii) not be exposed to the risk of performance of the Portfolio Assets relating to the Certificates; (iii) will not have any preferential claim or recourse over the Trust Assets, or rights to cause any sale or disposition of the Trust Assets except as expressly provided under the Transaction Documents; and (iv) only have rights against the Government of Sharjah, ranking pari passu with other senior unsecured obligations as provided in the Transaction Documents.
Moody's also notes that its Sukuk rating does not express an opinion on the structure's compliance with Shari'ah law.
Moody's says that the credit strength of the emirate is primarily supported by its very strong fiscal and government debt position. Aided by a competitive manufacturing sector, Sharjah's credit strength is also supported by the relatively higher degree of economic diversification -- compared to the rest of the
Moody's observes that
Furthermore, Moody's notes the risk that the
In Moody's view,
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