Sharjah, United Arab Emirates – Sharjah-based real estate developer Arada, rated B1 by Moody’s and B by Fitch, has closed a new $450 million sukuk issuance, which has been listed on the London Stock Exchange and Nasdaq Dubai.
The new five-year issuance, rated BB- by Fitch and B1 by Moody’s, was priced at an annualized yield of 7.150%, a spread of 47.5-60 basis points over the initial guidance of 7.625%-7.750%, and a spread of 317 basis points over US Treasuries, the tightest reoffering spread ever achieved by Arada.
The proceeds from this issuance will be used to tender up to USD 100 million of Arada’s existing Sukuk, which will mature in 2027, with the remainder allocated for general corporate purposes.
The sukuk issuance witnessed strong demand from both regional and international investors, with subscriptions peaking at over US$2 billion (excluding joint lead managers), more than four times the offer size.
HRH Prince Khaled bin Alwaleed bin Talal, Executive Vice Chairman of Arada, said: “Our recent successful return to global markets once again reflects the confidence of investors from the region and around the world in Arada’s proven track record, strong financial position, and promising growth prospects. This issuance serves as a launching pad for our next phase, as we continue to explore growth opportunities both within the UAE and abroad.”
The geographical distribution of investors in this sukuk issue was diverse, spanning Europe, the Middle East, and Asia. The list of investors included banks, private banks, asset managers, investment funds, and hedge funds.
The joint global coordinators for this sukuk issuance included Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, Mashreq Bank, and Standard Chartered Bank. The joint lead managers and bookrunners included Arab Bank, Arqaam Capital, Bank ABC, RAKbank, Sharjah Islamic Bank, and Warba Bank.
Since its launch in 2017, Arada has launched nine successful integrated projects in Sharjah and Dubai, and has a portfolio of current and future projects in the UAE and Australia worth more than AED 90 billion. To date, Arada has sold more than 17,000 residential units, worth more than AED 29 billion, with more than 10,000 units completed.
