Conventional problems

Author: | Published: 1 Dec 2007

The Middle East securitisation market took a long-awaited step forward this summer, with the completion of the region's first securitisation deals, including the first commercial mortgage-backed securitisation, led by HSBC. The US dollar-denominated, asset-backed notes issued by UAE CMBS Vehicle No 1 Limited, were given ratings of AA- by Fitch, and Aa3 by Moody's. The Al Thuraya office tower, located in the Dubai Technology and Media Free Zone (TECOM), backed the notes. It is the culmination of the efforts of a number of practitioners in recent years to develop a viable securitisation platform in this fast-growing region.

The misconception that transactions structured in the Gulf Co-operation Council (GCC) are required to be compliant with shariah is a common one. The UAE CMBS deal was in fact structured as a conventional securitisation, with a structure similar to European commercial, mortgage-backed deals. A diagram showing the structure of the UAE CMBS securitisation...