Moody’s assigns (P)BA1 rating to NEDC’S sukuk

Moody's Investors Service has assigned a (P)BA1 rating to the backed senior unsecured trust certificate programme (the sukuk programme) of Mazoon Assets Company, a special purpose vehicle established by Nama Electricity Distribution Company (NEDC).

Moody's has also assigned a (P)BA1 rating to the senior unsecured GMTN issuance programme (the GMTN programme) established under Nama Electricity Distribution Company. The outlook is stable, according to a statement issued by Moody's.

The assigned (P)BA1 rating on the sukuk programme is at the same level as NEDC'S Ba1 corporate family rating (CFR). In Moody's view, the potential certificate holders (1) will be effectively exposed to NEDC'S senior unsecured credit risk; (2) 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 (3) will only have rights against NEDC, ranking pari passu with other senior unsecured obligations as provided in the transaction documents.

As such, Moody's said a change in NEDC'S rating will be reflected in the ratings of the sukuk programme and any certificates issued under the programme. The sukuk is structured as an Ijara (asset sale and lease back transaction).

'Similar to the new sukuk programme, a (P)BA1 rating has been assigned to the new GMTN programme. Bonds issued under the GMTN programme will rank pari passu with the other senior unsecured obligations of NEDC,' Moody's said.

As part of its funding plans, NEDC is expected to issue bonds and sukuk under these newly established programmes to refinance shortterm debt and fund ongoing capital investment, the rating agency added.

Moody's views NEDC, formerly Mazoon Electricity Company, as a governmentrelated issuer (GRI) whose Ba1 CFR reflects a Baseline Credit Assessment (BCA) of ba2, combined with a very high level of dependence and a high level of support from the Government of Oman.