Riyadh – Mubasher: Moody's Investors Service on Tuesday assigned a (P)Baa3 senior unsecured rating with a stable outlook to Saudi’s Almarai Co.’s potential sukuk issuance.

“Under this Programme, the future certificates holders will be effectively exposed to Almarai's senior unsecured credit risk and will not have any preferential claim or recourse over the trust assets,” the rating agency said in its report.

Holders of Almarai’s certificates “will only have rights against Almarai, ranking pari passu with other senior unsecured obligations as provided in the transaction documents,” Moody’s added in its note.

Moody’s said that the issue may amount to “$2 billion,” although, earlier on Tuesday, Almarai said it had not specified the value of the sukuk issue. However, the Saudi dairy firm said it was planning to meet with investors for the sukuk issue starting 21 February.

The stable outlook indicates Moody’s forecast that Almarai's credit profile would be able to face “current adverse” market conditions “without breaching the current rating category guidance.”

Proceeds of this expected issue will be allocated to the issuer, Almarai Sukuk Ltd, to acquire a portfolio of assets including not less than 34% of the aggregate face value of the certificates in tangible assets from Almarai and “no more than 66% of the aggregate face amount of the certificates in Shari'ah-compliant commodities to be sold to Almarai on a deferred payment basis for a deferred sale price pursuant to the terms of the Master Murabaha Agreement,” Moody’s stated.

Last week, the US-based rating agency assigned a ‘Baa3’ rating to Saudi company Almarai with a stable outlook, indicating that the rating reflected Almarai’s position in the Saudi market as well as its EBITDA. 

Almarai said it was “satisfied” with the ratings given to it by both Moody’s Investors Service and Standard and Poor’s (S&P).