Dubai: Arada Developments LLC, rated B1 by Moody’s and B+ by Fitch, has successfully completed the issuance of a US$450 million Sukuk, which has been listed on the London Stock Exchange and the Nasdaq Dubai. The five-year fixed rate RegS Sukuk issuance, rated BB- by Fitch and B1 by Moody’s, was priced with a coupon of 7.150%, tightening 47.5bps- 60bps from the initial price guidance of 7.625%-7.750% for a spread of 317 bps over US Treasuries, marking the tightest reoffer yield ever achieved by Arada.
According to Emirates News Agency, the proceeds of the issuance will be used for a tender offer of up to US$100 million on Arada’s existing Sukuk maturing in 2027, with the balance earmarked for general corporate purposes. The Sukuk issuance saw strong demand from both regional and international investors, with a subscription order book peaking above US$2 billion (excluding Joint Lead Managers), which is equivalent to over four times the offer size.
HRH Prince Khaled bin Alwaleed bin Talal, Executive Vice Chairman of Arada, expressed that this successful return to the global markets reflects the trust placed by investors in Arada’s track record, financial position, and growth prospects. This issuance is seen as a platform for Arada’s next phase of growth as it continues to target opportunities in the UAE and abroad.
Investor interest for the Sukuk was widespread, coming from Europe, the Middle East, and Asia. The investors included banks, private banks, asset and fund managers, and hedge funds. The Joint Global Coordinators for the Sukuk were Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, Mashreq, and Standard Chartered Bank. Meanwhile, Arab Bank, Arqaam Capital, Bank ABC, RAK Bank, Sharjah Islamic Bank, and Warba Bank acted as Joint Lead Managers and Bookrunners.
Since its inception in 2017, Arada has launched nine successful projects in both Sharjah and Dubai and has a pipeline of projects in the UAE and Australia valued at over AED90 billion. In total, Arada has sold over 17,000 units since its inception, valued at over AED29 billion, with over 10,000 units completed.