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 RATIONALE
The 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, and adherence to publicly stated financial policies since the IPO, including a net leverage policy of below 2.5x (pre-IFRS 16) and a dividend payout ratio of 40%-70% of net income. We also expect the company to maintain prudent liquidity management and to continue to proactively address structural working capital challenges linked to insurance reimbursement cycles.
These mitigants partially offset social risks inherent to the healthcare sector, including sensitivity to demographic and societal trends and reliance on a specialized workforce, as well as ownership concentration risk associated with the founder, who controls 70% of the share capital and also serves as Chief Executive Officer.
We expect Burjeel's liquidity to improve following a contemplated AED1.8 billion ($500 million) inaugural sukuk issuance. The company's primary sources of liquidity as of 31 March 2026 consist of AED219 million of cash and cash equivalents, the newly available and fully undrawn committed RCF of AED750 million, and forecasted funds from operations over the next 18 months of around AED2.0 billion. These sources are sufficient to cover the company's basic obligations over the next 18 months, which include a combined forecasted outflow of around AED2.0 billion consisting mainly of AED900 million in working capital outflow, AED300 million in dividends, and AED950 million of committed and uncommitted capital investment.
Our assessment is based on a central scenario that assumes a prolonged and significant disruption to the Strait of Hormuz through autumn 2026, with no lasting damage to key energy production capacity and supply infrastructure. Nevertheless, we recognize that Burjeel operates in a region directly exposed to the ongoing Middle East conflict and a material escalation, including damage to energy infrastructure in the UAE or a complete closure of the Strait beyond the fourth quarter, could have a more significant effect on its creditworthiness.
SUKUK AND CAPITAL STRUCTURE
The intended sukuk structure will consist of no less than 55% Ijara assets and the remaining 45% comprising Murabaha assets. The Ijara assets include, among others, medical equipment and machinery, the BMC building, and the right to lease or use the BMC land (27 years from 2022), supported by a Musataha agreement.
We have assigned a (P)Ba2 rating to the backed senior unsecured trust certificate issuance programme. The alignment of the provisional programme rating with Burjeel's Ba2 CFR is because certificate holders will be effectively exposed to the creditworthiness of Burjeel for the periodic distributions (akin to coupon payments) and principal repayment of the sukuk that will be issued under the programme. Certificate holders will have rights against Burjeel as defined under the sukuk transaction documents, and these rights will rank pari passu with other senior unsecured obligations of Burjeel. Sukuk holders will not be exposed to the performance risk of the investment portfolio related to the certificates and will not have any preferential claim or recourse over the relevant trust assets.
We understand that Burjeel is committed to maintaining a predominantly senior unsecured capital structure following the completion of the sukuk transaction. We assume that Burjeel's committed RCF size will be AED750 million under our base case of AED1.8 billion ($500 million) debut sukuk issuance. The RCF is a single senior secured facility benefiting from a receivables-based collateral package with a minimum security value of 50% of total commitments (equivalent to AED375 million under this scenario). For recovery analysis purposes, this implies that approximately half of the exposure is effectively collateralised, with the residual claim ranking pari passu with the planned senior unsecured sukuk issuance. Should the proportion of secured debt increase over time, we could introduce notching to reflect the subordination.
OUTLOOK
The stable outlook reflects our expectation that Burjeel's operational performance will remain robust over the next 12-18 months, and that the company will continue to maintain good liquidity during the current investment cycle.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Burjeel's rating could be upgraded should the company meaningfully increase its scale, diversify its revenue profile and demonstrate over time a robust operating track record in generating positive free cash flow, while maintaining a good liquidity profile. Upward pressure would also require the company to exhibit strong credit metrics, such that Moody's adjusted Debt/EBITDA is sustained below 3.0x, and RCF/Net Debt and EBITA/Interest Expense are sustained above 30% and 4.5x respectively.
Burjeel's rating could be downgraded if the company's liquidity position weakens or the operating environment deteriorates, which could cause revenue and gross margin declines. The rating could also come under pressure if the company's positive cash flow generating ability is impacted by a prolonged period of negative working capital movement. Downward pressure could also arise if the company's credit metrics weaken on a sustained basis, such that Moody's adjusted Debt/EBITDA is sustained above 4.0x, and RCF/Net Debt and EBITA/Interest Expense are sustained below 20% and 3.5x respectively.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Business and Consumer Services published in February 2026 and available at https://ratings.moodys.com/rmc-documents/459827 . Alternatively, please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.
The net effect of any adjustments applied to rating factor scores or scorecard outputs under the primary methodology(ies), if any, was not material to the ratings addressed in this announcement. The local market analyst for these ratings is Paul Feghaly, +971 (423) 795-31.
REGULATORY DISCLOSURES
For further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found on https://ratings.moodys.com/rating-definitions .
For any affected securities or rated entities receiving direct credit support/credit substitution from another entity or entities subject to a credit rating action (the supporting entity), and whose ratings may change as a result of a credit rating action as to the supporting entity, the associated regulatory disclosures will relate to the supporting entity. Exceptions to this approach may be applicable in certain jurisdictions.
For ratings issued on a program, series, category/class of debt or security, certain regulatory disclosures applicable to each rating of a subsequently issued bond or note of the same series, category/class of debt, or security, or pursuant to a program for which the ratings are derived exclusively from existing ratings, in accordance with Moody's rating practices, can be found in the most recent Credit Rating Announcement related to the same class of Credit Rating.
For provisional ratings, the Credit Rating Announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating.
Moody's does not always publish a separate Credit Rating Announcement for each Credit Rating assigned in the Anticipated Ratings Process or Subsequent Ratings Process.
These ratings are solicited. Please refer to Moody's Policy for Designating and Assigning Unsolicited Credit Ratings available on its website https://ratings.moodys.com .
Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.
At least one ESG consideration was material to the credit rating action(s) announced and described above. Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://ratings.moodys.com/documents/PBC_1462204 .
The Global Scale Credit Rating(s) discussed in this Credit Rating Announcement was(were) issued by one of Moody's affiliates outside the UK and is(are) endorsed for use in the UK in accordance with the UK CRA Regulation.
Please see https://ratings.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.
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