Abu Dhabi's Aldar Properties, the UAE's second largest property developer by market value, has set final pricing for Islamic bonds worth at least $800 million (Dh2.9 billion).
The five-year sukuk was priced at 175 basis points above the three-month Emirates Interbank Offered Rate (Eibor), a pricing statement said, which also said there had been strong demand. Three-month Eibor is currently at 1.875 per cent. "Demand was very strong. We had a lot of interest regionally, domestically and internationally," one of the bankers who arranged the sale said. He declined to be named.
The size of the sale has yet to be finalised, but will be worth at least Dh3bn, the banker said. Two arranging bankers said in May it could range from benchmark size to $1.5bn in value, depending on demand. Benchmark size is typically at least $500m. Aldar has said it would use the money raised from the sale to finance its projects.
With about $65bn of projects in the pipeline, the property company has been raising funds to spearhead the Abu Dhabi government's drive to develop residential and leisure districts in the world's fifth-largest oil exporter. The pricing for the dirham-denominated bonds was at the top end of previously indicated price guidance. The bonds have an ijara, or leasing structure.
Aldar is one of a crop of borrowers to return to the Islamic bond market with a dirham issue in recent weeks after bond sales slowed in the second half of last year. A global credit crunch triggered by defaults on US home loans had prompted several Gulf borrowers to postpone issuance.