Aldar raises $750 million via 5-year sukuk

Aldar Properties PJSC, Abu Dhabi's listed property development, investment and management company, on Wednesday announced that it has raised $750million via a five-year sukuk issued at par.

At three and a half times oversubscribed, there was considerable interest from investors in Asia, the Middle East and Europe.  The transaction, which represents Aldar’s first debt capital markets issuance since the merger with Sorouh, was priced very competitively at a spread of 290bps over USD Mid Swaps for a fixed profit rate of 4.348 per cent.
 
Wednesday’s transaction is another important milestone in the company’s debt strategy focused on reducing the cost of borrowing, extending its maturity profile and lowering it leverage levels. The sukuk follows the Dh4.0billion in bank financings, announced on  November 7, that carried an average margin of 1.3 per cent above base rate and an average maturity of three and half years. These facilities remain undrawn at this time and will be used for refinancing purposes. This followed a successful margin reduction on a Dh2.1 billion syndicated loan during the second quarter 2013.
 
At the end of the third quarter 2013, total assets were Dh44.8 billion and gearing (net debt to equity) was 55 per cent (FY 2012: 144 per cent). Aldar also continued to have a strong cash position with Dh6.3 billion of cash and available liquidity at the end of the third quarter.
 
Abubaker Seddiq Al Khoori, Chairman of Aldar, commented; "The sukuk marks an important milestone for Aldar and we are pleased with the overwhelming response by the local and international investors in our transaction. 2013 has been a transformational year for Aldar and I am very pleased to see we are moving forward quickly in executing our strategy."
 
Chief Financial Officer Greg Fewer added; "This transaction fits in well with our financing strategy as it reduces our cost of capital and expands the breadth and depth of our investor base. Aldar's credit fundamentals are very strong and I am pleased that the market has responded so positively to our first capital markets transaction since the merger with Sorouh."

Aldar’s improved credit profile was marked out recently by Moody’s and Standard & Poor’s (S&P) who both significantly upgraded their ratings of the company.  Moody’s moved Aldar three notches from B1 to Ba1 with a positive outlook.  This was on top of the one notch upgrade in July.  S&P raised Aldar to BB, a two notch upgrade.
 
Standard Chartered Bank acted as Sole Global Coordinator and Joint Lead Manager. Other Joint Lead Managers were Dubai Islamic Bank PJSC, First Gulf Bank PJSC, Goldman Sachs International and National Bank of Abu Dhabi PJSC. Abu Dhabi Islamic Bank PJSC and Union National Bank PJSC acted as Senior Co-Lead Managers. The Regulation S only trust certificates were issued under standalone documentation and will be listed on the Irish Stock Exchange.



 

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