Tabreed raises $500m with new 7-year sukuk

The Gulf Today - Business - - FRONT PAGE -

ABU DHABI: Na­tional Cen­tral Cool­ing Com­pany (Tabreed) on Tues­day an­nounced it has suc­cess­fully raised $500 mil­lion (Dhs1.8 bil­lion) with a fixed rate se­nior un­se­cured US dol­lar de­nom­i­nated Regs sukuk with a 7-year tenor. The is­sue fol­lows a se­ries of fixed in­come in­vestor meet­ings which took place in Europe and Asia, as well as in the United Arab Emi­rates.

The new sukuk, which will be listed on the Lon­don Stock Ex­change, had strong in­sti­tu­tional de­mand both lo­cally and in Asia and Europe, which en­abled the is­sue to be over­sub­scribed by 50 per cent. The sukuk was com­pet­i­tively priced, with a profit rate of 5.5 per cent, un­der­pinned by Moody’s Baa3 and Fitch’s BBB credit rat­ings, which were an­nounced last week. These rat­ings are the first to be as­signed to Tabreed by Moody’s and Fitch, and have also been as­signed to the sukuk it­self.

In ad­di­tion to the new sukuk, Tabreed has ar­ranged new bank fa­cil­i­ties up to Dhs1.5 bil­lion. To­gether with the pro­ceeds from the new sukuk, these will be used to re­fi­nance Dhs2.8 bil­lion of cur­rent cor­po­rate debt. The re­fi­nanc­ing of this debt will de­liver a num­ber of ben­e­fits, in­clud­ing im­proved bal­ance sheet ef­fi­ciency and a longer debt ma­tu­rity. These in turn will fur­ther im­prove Tabreed’s cash­flow, pro­vid­ing fresh im­pe­tus for the com­pany’s ex­pan­sion into both ex­ist­ing and new mar­kets.

Khaled Ab­dulla Al Qubaisi, Tabreed’s Chair­man, com­mented, “We are very pleased that Tabreed has been rated as In­vest­ment Grade by Moody’s and Fitch. We see this as a tes­ta­ment to the fi­nan­cial strength, ro­bust busi­ness model, and strong po­si­tion we have in the UAE and across the GCC. This new sukuk, which was well re­ceived by the mar­ket, fur­ther strength­ens our bal­ance sheet and re­in­forces our ro­bust fi­nan­cial po­si­tion and leaves us well placed for fur­ther growth.”

Jasim Hu­sain Tha­bet, Tabreed’s Chief Ex­ec­u­tive Of­fi­cer, said, “We are de­lighted with the mar­ket’s pos­i­tive re­sponse to our sukuk, and with the recog­ni­tion Tabreed con­tin­ues to gain as a safe and high­qual­ity in­vest­ment. This suc­cess­ful is­suance leaves us in a stronger po­si­tion to lever­age growth, with even greater cap­i­tal and op­er­a­tional ef­fi­ciency.”

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