Moody’s rates Dar Al-Arkan sukuk B1

Moody's Investors Service said it affirmed Dar Al-Arkan Real Estate Development Co.’s (DAAR) B1 corporate family rating and B1-PD probability of default rating.

The outlook was changed to stable from negative.

In addition, the agency assigned a provisional B1 rating to the trust certificate issuance program of Dar Al-Arkan Sukuk Co. Ltd. (issuer and trustee), a special purpose company established in the Cayman Islands.

The outlook is stable.

Moody's also assigned B1 (LGD 4) ratings to both outstanding sukuk issued under the program – the $450 million sukuk due in 2018 and $400 million sukuk due in 2019.

"The decision to change the outlook to stable from negative reflects Moody's view that DAAR's operating environment will stabilize in 2017 and the government of Saudi Arabia's initiatives to support the non-oil sector will be supportive to the development of the real estate sector. In addition, despite the challenging and uncertain conditions seen in 2016, DAAR has continued to demonstrate its financial flexibility to generate free cash flows in order to meet its debt obligations," Moody's assistant vice president, analyst Rehan Akbar said in a news release.

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