Emirates National Securitization Corporation in First Dubai Securitization Offered to U.S. Investors

May 17, 2005

Cleary Gottlieb acted as counsel in the $350 million securitization of real estate contracts and issuance of floating rate secured notes due 2014 by a special purpose vehicle of Emirates National Securitization Corporation (ENSeC).   Cleary represented Dubai-based property development firm Nakheel (L.L.C.) and home finance company Tamweel (L.L.C.),   both partly and indirectly owned by the Dubai ruling family.  The transaction marks the first Dubai securitization offered to U.S. investors.

The deal involved securitization of real estate contracts on The Palm, Jumeirah development, consisting of a group of man-made islands in the shape of a palm tree.  The development, located off the Dubai coast, is currently under construction by a Nakheel subsidiary.  ENSeC will use the proceeds from the sale of the notes to purchase from Tamweel substantially all of the residential property at The Palm, Jumeirah development, which will then be leased back to Tamweel in exchange for monthly rental payments.  ENSeC will use the rental income to make monthly interest payments on the notes.  Tamweel will generate cash to make the rental payments primarily through home installment finance agreements and home finance agreements.  Home installment finance agreements allow obligors to purchase individual portions of residential property on completion of construction, and home finance agreements provide 10-year financing for such purposes.  Nakheel has unconditionally guaranteed Tamweel’s obligations to ENSeC by establishing a $350 million reserve fund.

Moody’s rated the notes Aaa and Standard & Poor’s rated them AAA, the first time a Dubai debt offering has received such a high rating.