Arada completes issuance of $450 million Sukuk

Arada Developments, rated B1 by Moody’s and B+ by Fitch, has successfully completed the issuance of a $450 million Sukuk, which has been listed on the London Stock Exchange and the Nasdaq Dubai.

The five-year fixed rate RegS Sukuk issuance, rated BB- by Fitch and B1 by Moody’s, was priced with a coupon of 7.150 per cent, tightening 47.5bps- 60bps from the initial price guidance of 7.625 per cent-7.750 per cent for a spread of 317 bps over US Treasuries, for the tightest reoffer yield ever achieved by Arada.

The proceeds of the issuance will be used for a tender offer of up to US$100 million on Arada’s existing Sukuk maturing 2027, with the balance for general corporate purposes.

The Sukuk issuance saw strong demand from both regional and international investors with a subscription order book peaking above $2 billion (excluding Joint Lead Managers), equivalent to over four times the offer size.

Prince Khaled Bin Alwaleed Bin Talal, Executive Vice Chairman of Arada, said, "Our latest successful return to the global markets reflects once again the trust being placed by regional and international investors in Arada’s track record, robust financial position and growth prospects. This issuance serves as a platform of our next phase of growth as we continue target growth opportunities both at home in the UAE and abroad.”

Investor interest for the Sukuk was diversified geographically, coming from Europe, the Middle East and Asia. The investors for this issuance include banks, private banks, asset and fund managers, and hedge funds.

The Joint Global Coordinators for the Sukuk were Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, Mashreq and Standard Chartered Bank, while Arab Bank, Arqaam Capital, Bank ABC, RAK Bank, Sharjah Islamic Bank and Warba Bank acted as Joint Lead Managers and Bookrunners.

Since its launch in 2017, Arada has launched nine successful projects in both Sharjah and Dubai, and has a pipeline of existing and future projects in the UAE and Australia valued at over DhsD90 billion. In total, Arada has sold over 17,000 units since inception, valued at over Dhs29 billion, with over 10,000 units completed.

WAM