S&P rates Damac Real Estate sukuk BB-

S&P Global Ratings said it assigned its BB- preliminary issue credit rating to Damac Real Estate Development Ltd.'s proposed senior unsecured sukuk trust certificates.

Under the sukuk documents, Alpha Star Holding VIII Ltd. will enter a sale and purchase agreement with each of Front Line Investment Management LLC (Front Line; not rated) and Damac Crescent Properties LLC (Damac Crescent; not rated), both 100% subsidiaries of Damac Real Estate Development Ltd. (Damac); as well as an ijara agreement, a service agency agreement, a sale and substitution undertaking, and a purchase undertaking with Front Line.

Alpha Star VIII will also enter a murabaha agreement with Damac (BB-/positive/--). In addition, Damac will provide a guarantee in favor of Alpha Star VIII and the delegate on Front Line's contractual obligations.

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