ZAWYA: Moody's Ratings assigns first time Ba2 rating to Burjeel and (P)Ba2 to its proposed sukuk programme

About this update from Burjeel Holdings Plc

Moody's Ratings (Moody's) has today assigned a Ba2 corporate family rating (CFR) and a Ba2-PD probability of default rating (PDR) to Burjeel Holdings PLC (Burjeel), a leading private healthcare services provider in the United Arab Emirates (UAE, Aa2 stable). Concurrently, we have assigned a (P)Ba2 rating to the backed senior unsecured trust certificate issuance programme (the "sukuk programme") of Burjeel Sukuk Limited, a special purpose vehicle established by Burjeel. The outlook on all entities is stable."The Ba2 rating reflects our expectation that Burjeel will maintain solid credit metrics and an improving liquidity profile following the completion of its planned inaugural sukuk issuance, while it continues to ramp up its super-specialty care platform" said Paul Feghaly, Analyst at Moody's Ratings.RATINGS RATIONALEThe Ba2 CFR assigned to Burjeel reflects the company's (1) strong market position in the Emirate of Abu Dhabi with expanding market presence across the UAE, Saudi Arabia and Oman; (2) good profitability across the Burjeel Hospital brand and growing contribution from the complex care super-specialty division; (3) favorable demographic trends and supportive regulatory environment with health insurance coverage being mandatory in the UAE; (4) solid credit metrics for the current rating level, with Moody's adjusted Debt/EBITDA trending below 3.0x in 2026F, and RCF/Net Debt and EBITA/Interest Expense trending towards 30% and 4.0x respectively; and (5) an improving liquidity profile following the completion of its planned sukuk issuance.The rating also incorporates Burjeel's (1) small scale and revenue concentration, with the Burjeel Hospital brand contributing around 75% of revenue in 2025; (2) low capacity utilization compared to industry benchmarks and associated ramp-up execution risks, albeit gradually improving at Burjeel Medical City (BMC); (3) sustained negative working capital movement and weak cash conversion cycle that exposes the company to liquidity risks; and (4) moderate risk of elevated employee turnover and high overhead costs for specialized talent in the super-specialty segment.Burjeel's CIS-3 indicates that ESG considerations have a limited impact on the current rating. The company benefits from low environmental exposure, mandatory health insurance coverage in the UAE, a multi-brand network that diversifies the customer base, ...

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