LONDON (Standard & Poor\'s) July 2, 2012--Standard & Poor\'s Ratings Services said today that it has assigned its \'BBB+\' issue rating to the Malaysian ringgit (MYR) 1.5 billion Islamic medium-term note program launched by the Development Bank of Kazakhstan (DBK; BBB+/Stable/A-2). The rating on the program and any issuance under it is linked to the issuer credit rating on the DBK. We believe the rationale for the transaction is to raise funds in accordance with the Islamic principle of Murabahah, with commodities as underlying assets.
Under the terms of the transaction, sukuk holders purchase the commodities from the Bursa Suq Al-Sila\'s commodity market at a purchase price, with the total value of that price limited under the program to MYR1.5 billion. DBK will immediately repurchase commodities from sukuk holders at a deferred sale price, which is defined as the purchase price plus profit and has to be settled over the tenor of sukuk. DBK will issue sukuk to the sukuk holders, which confirms the sukuk holders\' ownership of the commodities and their entitlement to receive the deferred sale price. DBK will then sell commodities back to the commodity market to raise the issuance proceeds. The tenor of the program is 20 years and the maturity of individual issues shall be more than one year and not exceed the remaining tenor of the program.
Standard & Poor\'s considers DBK\'s obligations under the transaction to be as important as its senior unsecured obligations, because the repayments to sukuk holders depend solely on the credit performance of DBK and are, in our view, ranked pari passu with other senior unsecured debt issued by DBK.