Jafz issues $650m sukuk due in 2019

First US dollar issuance 3.1 times oversubscribed

Jebel Ali Free Zone FZE (Jafz) announced it has successfully priced the issuance of $650m Sukuk Certificates due 2019, marking the company's first US dollar-denominated issuance and its first transaction in the international debt capital markets since 2007.
The certificates pay a profit rate to investors of 7 per cent per annum. The proceeds of the sukuk will be used to partly refinance Jafz's outstanding Dh7.5bn sukuk due November 2012, ahead of the stated maturity. Jafz will also contribute proceeds of Dh4.4bn bank facility and its own cash sources towards the redemption.
The transaction saw strong demand from regional and international investors, with the order book 3.1 times subscribed. The order book was well-diversified, both in terms of investor type and geography. European investors accounted for 26 per cent of the allocation, Asian accounts 7 per cent, US Offshore investors 2 per cent and Middle Eastern investors took up the balance of 65 per cent.
Salma Ali Saif Bin Hareb, CEO of Jafz, commented, "The success of this transaction is a testament to the confidence that investors have in the Jafz credit story, which is underpinned by strong, recurring cash flows as well as a strategic importance to the overall development of the Emirate of Dubai.
"This successful fund-raising exercise is another step towards execution of Jafz's refinancing and deleveraging strategy and the positive response from the market to the transaction and Jafz's strategy is especially encouraging."