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Arada Developments, rated B1 by Moody’s and B+ by Fitch, has mandated banks for a sukuk issuance, joining a growing number of property developers tapping debt markets to capitalise on a construction boom in the GCC.
Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, Mashreq and Standard Chartered Bank have been tapped as joint global coordinators, while Arab Bank, Arqaam Capital, Bank ABC, RAKBANK, Sharjah Islamic Bank and Warba Bank, have been appointed joint lead managers and bookrunners.
A global investor call, as well as a series of fixed income investor calls started Thursday.
The 5-year fixed rate Regulation S USD benchmark sukuk issuance has an expected rating of B1/BB- by Moody’s/Fitch and will fall under Arada Sukuk 2 Limited’s $1 billion Trust Certificate Issuance Programme.
In addition, Arada Developments has also announced a capped tender offer targeting up to $100 million in aggregate face amount of its $ 500 million Trust Certificates due 2027 to proactively manage its cost of funding and balance sheet and maturity profile.
The issuance will be the first by Arada this year, with proceeds used to acquire new land, Reuters reported last week, citing sources close to the deal.
Arada last raised debt in September 2024, issuing a $150 million tap on its $400 million sukuk maturing in June 2029. The company has one other outstanding bond, a $500 million 8.125% sukuk due in June 2027.
On Wednesday, the company announced that holders of its $550 million Trust Certificates approved an extraordinary resolution to modify terms and conditions of the certificates, which aimed at providing the company “with flexibility to capitalise on future market growth and expansion opportunities and to help it manage its capital structure, while maintaining a robust credit profile in line within its business plan,” IFR reported.
Arada, which is Sharjah’s largest property developer, is jointly owned by Sheikh Sultan bin Ahmed Al Qasimi, the Deputy Ruler of the Sharjah and Prince Khalid Bin Alwaleed Bin Talal Alsaud, a member of the royal family of the Saudi Arabia.
In recent months, several developers including Omniyat, Damac, and the Abu-Dhabi based Aldar Investment Properties have tapped debt markets with sukuk issuances.
(Writing by Bindu Rai, editing by Seban Scaria)
