Tabreed raises $500mn with 7 year Sukuk

The is­sue fol­lows a se­ries of fixed in­come in­vestor meet­ings held re­cently

Utilities Middle East - - NEWS -

District cool­ing firm Na­tional Cen­tral Cool­ing Com­pany (Tabreed) an­nounced it has suc­cess­fully raised $500mn (Dh1.8bn) 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 UAE.

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%.

The sukuk was com­pet­i­tively priced, with a profit rate of 5.5%, 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 AED1.5bn. To­gether with the pro­ceeds from the new sukuk, these will be used to re­fi­nance AED2.8bn 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 see this as a tes­ta­ment to our fi­nan­cial strength. 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.”

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