Tabreed raises $500mn with 7 year Sukuk
The issue follows a series of fixed income investor meetings held recently
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.”