Aldar completes sukuk refinancing

New Islamic bond benefited from strong regional Islamic demand and global interest

Aldar Properties said yesterday it has successfully priced its $500 million (Dh1.83 billion) 7-year sukuk at 4.75 per cent, and the proceeds will be used to refinance existing debt.

Aldar Investments is the region’s largest diversified real estate investment company, and its highest rated non-government related corporate. The new issuance demonstrates Aldar Investments’ ability to raise efficient long-term debt capital independently; and also successfully refinances Aldar’s forthcoming debt maturities.

The new sukuk, the first to be issued by an Abu Dhabi corporate entity since 2013, benefited from strong regional Islamic demand as well as international institutional interest which enabled the issue to be more than twice oversubscribed, the company said in a statement.

Combined with the group’s bank facilities, the debut sukuk extends overall debt maturity beyond 5 years at an average interest rate of 3.9 per cent, demonstrating the strength and resilience of Aldar’s balance sheet.

“This successful sukuk issuance is a strong result for Aldar and validates the rationale for establishing Aldar Investments. We want Aldar Investments to be the most cost-effective platform for real estate ownership in the region and this transaction moves us significantly towards that goal,” Greg Fewer, Chief Financial Officer, said in a statement.

The new sukuk was extremely competitively priced and was underpinned by Aldar Investments’ Baa1 credit rating. This debut sukuk from Aldar Investments progresses its funding strategy by positively positioning Aldar Investments within the international investor community as an independent borrower.

In August, Aldar Properties reported a 28 per cent plunge in its net profit for the second quarter of 2018 on the back of losses from the revaluation of properties.