UAE real estate developer Arada raises $400mln via 5-year sukuk
By Staff Writer
Arada Developments, rated B1/B+ (both negative outlook) by Moody’s and Fitch, has raised $400 million through the first new public debt issuance by a UAE real estate developer since the start of the US-Iran war.
The five-year fixed rate Regulation S offering has been priced with a coupon of 8.875%, paid semi-annually, along with a 9% yield and a re-offer price of 99.505. The spread was set at +407.4 basis points over US Treasuries.
IPTs for the Wakala / Murabaha structure were in the 9.375% area.
The final order book was in excess of $650 million, excluding JLM interest and no hedges.
The issuance has an expected rating of B1/BB- by Moody’s/Fitch and will fall under Arada Sukuk 2 Limited’s $1.5 billion Trust Certificate Issuance Programme.
A listing on the International Securities Market and Nasdaq Dubai will follow.
Arada’s latest debt outing could prove to be a test case in a market where investor demand for GCC real estate bond and sukuk issuances has been impacted since the onset of the US Iran war in February. Liquidity concerns have also affected several real estate developers who have been impacted by spiralling pre-development costs and supply chain disruptions following the closure of the Strait of Hormuz.
(Writing by Bindu Rai, editing by Seban Scaria)