Adel Al Shirawi announced: Tamweel's asset-backed securitization issue prices well
DUBAI — The largest provider of real estate finance in the UAE, Tamweel, yesterday said its debut Dh771.2 million ($210 million) asset-backed securitisation issue has "priced in spite of volatile market conditions."
It said in a statement that the Class A bonds would pay a variable return rate to investors of one-month US-dollar Libor, which is among the most common of benchmark interest rate indexes used to make adjustments to adjustable rate mortgages, plus 35 basis points.
"The attractive pricing of the issue reflects Tamweel's landmark achievement, especially considering that the asses-backed securitisation market is going through a volatile stage," said Adel Al Shirawi, the company's CEO. "This is indeed a great occasion for Tamweel - but also for the UAE and the region."
The statement said Tamweel's Class A bonds are expected to have Aa2 and AA ratings by Moody's Investors Service and Fitch Ratings Limited, respectively. Al Shirawi said the deal is the first internationally rated residential asset-backed securitisation out of the Middle East, where the rating is based on "perfected true sale of assets". He stressed that this is a "huge accomplishment" for the company, which is one of the first companies to issue asset-backed securities out of Dubai. "This issue, which was vetted by Tamweel's Shariah advisory board, is also one of the first securitisations of its type globally," he said. "The successful pricing of this securitisation demonstrates an impressive level of confidence in the quality of Tamweel's asset book and its superior risk management."
The statement said Morgan Stanley & Co. International PLC was appointed as joint manager and joint bookrunner for the issue and provider of hedging solutions. It added that Standard Chartered Bank was joint manager and joint bookrunner for the issue and provider of liquidity facilities.
Al Shirawi thanked the various government departments, particularly the Dubai's Lands Department and Department of Finance, for facilitating the development of a secondary market for home financing. He was also grateful to the Emirates National Securitisation Corp., which structured the landmark transaction.
"Tamweel tapping into international capital markets coincides with our regional expansion plans, providing better and cheaper funding mechanisms for our regional base assets," he said.