Jafza to issue $650m sukuk today

Sukuk to help repay $2 billion redemption; profit rate guidance at 7-7.25%

Jebel Ali Free Zone Authority (Jafza), a state-owned industrial park, plans to issue a $650-million, seven-year Islamic bond as early as Tuesday to help refinance an upcoming maturity and has set initial price guidance for the deal, arranging banks said.

Profit rate guidance for the sukuk is indicated at between 7 and 7.25 percent and the new issue had attracted orders of about $1.75 billion at 1200 GMT (4pm UAE time) on Tuesday, according to an update from lead arrangers.

Books are due to close at 1300 GMT (5pm UAE time).

Jafza, part of Dubai's flagship Dubai World conglomerate, is putting together a financing package to meet a $2.04 billion Islamic bond which matures in November.

The company plans to raise $1.85 billion towards redemption of the sukuk through this new issue and a $1.2 billion Islamic financing facility.

The remainder will be paid through Jafza's cash balance.

The original dirham-denominated bond is expected to be repaid two days after the new $650 million deal settles, lead arrangers said. Bondholders voted last month to let Jafza repay the debt early.

On Tuesday, the bond was bid at close to par at 99.150 and was yielding 4.9 percent, according to Thomson Reuters data. Yields have fallen from near 10 percent levels at the end of the first quarter as a lack of clarity on repayment worried investors.

Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, National Bank of Abu Dhabi, Citi, Dubai Islamic Bank, Emirates NBD, Samba Financial Group and Standard Chartered are bookrunners on the sukuk.

  • Twitter
  • submit to reddit
comments powered by Disqus


Most Popular in Business


Emirates 24|7

In Case You Missed It ...

Happiness Meter Icon