Aldar hires banks for $750m Islamic bond

Issuance is meant to refinance outstanding sukuk of similar amount due this December

Aldar Properties, the statelinked builder of Abu Dhabi’s Formula One circuit, has hired banks to arrange a US dollar-denominated sukuk issue of at least $750 million (Dh2.75 billion), sources familiar with the matter said.

The company has mandated JPMorgan, Standard Chartered, and First Abu Dhabi Bank for the debt sale, said the sources. Other banks, including Dubai Islamic Bank, will also have a role in the deal, said the sources. The issue will refinance a $750 million outstanding sukuk, or Islamic bond, due in December this year. The size of the transaction could increase, depending on demand, one of the sources said.

Aldar, JPMorgan, Standard Chartered and First Abu Dhabi Bank declined to comment. Dubai Islamic Bank did not immediately respond to a request for comment.

Aldar, Abu Dhabi’s largest developer, reported last month a 28 per cent fall in secondquarter profit attributing it to a revaluation of properties related to its retail portfolio.

A sluggish economy and property market in the capital has depressed values and rentals in the last two years.

Still, Aldar is optimistic, following a Dh50 billion ($13.61 billion) stimulus plan announced by Abu Dhabi in June. The developer reported a net profit attributable to owners of Dh446.5 million in the three months to June 30.

The planned sukuk, which could be announced next week, would add to a growing pipeline of Islamic bonds being prepared in Abu Dhabi.