Moody's Investors Service has affirmed a provisional (P) A3 rating to the 3.5 billion ringgit ($1.1 billion) Islamic bond programme of Abu Dhabi National Energy Company (Taqa) with a stable outlook.

Moody's in a statement said the rating on the the Malaysian sukuk programme was provisional, subject to receipt of the final transaction documents.

The (P)A3 rating assumes that the documentation is legally valid, binding and enforceable, the ratings agency said in a statement.

Taqa is indirectly 72.6 per cent owned by Abu Dhabi government with such ownership interest held primarily through Abu Dhabi Water and Electricity Authority (Adwea) which has 51 per cent of the stake and the government-affiliated Farmers' Fund (21 per cent).

The remaining shares are held by local private shareholders (27.4 per cent), including treasury shares held by Taqa (2.5 per cent), limited to citizens of the UAE.

Taqa is a holding company of majority stakes in all operating independent water and power producers (IWPPs) that have been privatized by Adwea, which together provide over 95 per cent of Abu Dhabi's power generation and water desalination capacity, as well as a major portion of power generation and water desalination capacity of Fujairah.

Sukuk Murabahah instruments to be issued pursuant to the programme will rank pari passu with all other unsecured and unsubordinated obligations of Taqa and therefore carry the same rating as Taqa's A3 long term issuer rating, said Moody's.

The documentation contains a negative pledge and a cross default and acceleration clause to other debt issued by Taqa, it added.

The purpose of establishing the Sukuk Programme by Taqa is to diversify its investor base, with management's intention of using proceeds for general corporate purposes.-TradeArabia News Service