Kuwait developer NREC plans $500m sukuk

The company is about to obtain a credit rating from Standard & Poor’s

Kuwait’s National Real Estate Company (NREC) plans to issue a $500 million (Dh1.84 million) sukuk early next year to help fund new projects and to refinance existing debt, its chief financial officer told Reuters yesterday.

The company is about to obtain a credit rating from Standard & Poor’s and will then seek to appoint banks to arrange the planned Islamic bond issue, Shiv Hiremath said in an interview on the sidelines of a finance conference.

The sukuk will have a sevenyear maturity, and while the exact timing of the sale would depend on market conditions, the company would like to raise the financing in the first quarter of next year.

Proceeds from the sale will be partly used to back new real estate developments and partly to refinance existing bank debt, Hiremath said.

NREC is also raising a Dh2.4 billion ($654 million) loan for the development of the Reem Mall in Abu Dhabi.

The company is arranging the deal itself with a club of banks, with the seven-year facility expected to be completed by the end of November, Hiremath said.

NREC and United Projects for Aviation Services Company (UPAC) are the developers of the Reem Mall, which is due to open in 2018.

Costing Dh4 billion, the mall will have 2.8 million square feet of retail space and host around 450 stores when completed.