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Arada Developments, rated B1 by Moody’s and B+ by Fitch, has launched its $450 million sukuk with a coupon of 7.150%, tightening from the initial price guidance of 7.625%-7.750% for a spread of 317.3 basis points over US Treasuries.
Proceeds of the five-year fixed rate Reg S Sukuk issuance will be used for a tender offer of up to $100 million on Arada’s existing sukuk maturing 2027, with the balance deployed for general corporate purposes.
Demand came from both regional and international investors with a subscription order book peaking above $2 billion (excluding Joint Lead Managers), equivalent to over four times the offer size.
The sukuk has been listed on the London Stock Exchange and the Nasdaq Dubai and will fall under Arada Sukuk 2 Limited’s $1 billion Trust Certificate Issuance Programme.
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, were appointed joint lead managers and bookrunners on the issuance.
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.
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.
The issuance by Arada is the latest in a growing number of property developers tapping debt markets to capitalise on a construction boom in the GCC. 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 Brinda Darasha)
