Fitch Ratings has assigned RAKFUNDING CAYMAN LTD’s (RAKFUNDING) USD1bn guaranteed euro medium term note (EMTN) programme expected Long- and Short-Term Ratings of ‘BBB+(EXP)’ and ‘F2(EXP)’ respectively. The assignment of the final ratings is contingent upon the receipt of final documents conforming to information already reviewed.

KEY RATING DRIVERS

The ratings of RAKFUNDING’s guaranteed EMTN programme are aligned with National Bank of Ras Al-Khaimah’s (RAKBANK) Long-term and Short-term Issuer Default Ratings (IDRs). This is based on Fitch’s expectation that RAKBANK (BBB+/Stable/F2), which fully owns RAKFUNDING, will support the debt issued under the programme, if required. RAKBANK has set up RAKFUNDING solely to issue debt under the programme. The likelihood of support is further evidenced by the guarantee provided.

Senior notes issued by RAKFUNDING under the programme will be guaranteed by RAKBANK. RAKBANK’s obligations under the guarantee will be an unsecured and unsubordinated obligation of the bank and will rank at least equally with its other unsecured and unsubordinated obligations.

RAKBANK’s IDRs are in turn based on high probability of support, if required, from the UAE federal authorities.

RATING SENSITIVITIES

The guaranteed EMTN programme’s ratings are sensitive to a change in RAKBANK’s IDRs, which will reflect any change in Fitch’s assessment of the ability and propensity of the UAE federal authorities to support the bank, or a change in Fitch’s view of support of the banking system in the UAE.