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Aldar Investments completes seven-year $500m Islamic bond issue

Aldar Properties said the issue was "more than twice oversubscribed"

According to Aldar, the new sukuk is the first to be issued by an Abu Dhabi corporate entity since 2013 [image: Meera by Aldar].
According to Aldar, the new sukuk is the first to be issued by an Abu Dhabi corporate entity since 2013 [image: Meera by Aldar].

The investment subsidiary of Abu Dhabi development heavyweight Aldar Properties has successfully issued its first fixed rate USD-denominated Islamic bond, raising a total of $500m (AED1.84m).

In a filing to the Abu Dhabi Securities Exchange (ADX), Aldar said the sukuk, which also has a tenor of seven years , was “competitively priced, with a profit rate of 4.75%”, underpinned by Aldar Investments’ Baa1 credit rating.

The rating is given by US agency Moody’s to indicate "moderate credit risk" over the long term, with some speculative elements.

READ: Abu Dhabi's Aldar reports 11.4% decline in H1 2018 net profit

According to Aldar, the new sukuk is the first to be issued by an Abu Dhabi corporate entity since 2013, and “benefited from strong regional Islamic demand as well as international institutional interest”.

It also extends overall debt maturity beyond five years at an average interest rate of 3.9%, which Aldar said demonstrates “the strength and resilience” of the group's balance sheet.

Speaking on the news, Greg Fewer, chief financial officer of Aldar, said: “This successful sukuk issuance is a strong result for Aldar and validates the rationale for establishing Aldar Investments.

READ: Aldar acquires $1bn worth of Abu Dhabi real estate assets from TDIC

“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.”

The issuance comes just over two weeks after Aldar announced on 12 September the creation of Aldar Investment Properties, which will take ownership of some of Abu Dhabi’s high quality, revenue-generating real estate assets, valued at $5.4bn (AED20bn).

Incorporated at Abu Dhabi’s international financial centre, Abu Dhabi Global Market, the new subsidiary features recurring revenue assets including more than 5,000 residential units and 50ha of prime retail and commercial space.

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