Sharjah-based Arada Developments has started marketing a five-year US dollar sukuk and launched a cash tender offer for $411.7 million of its Islamic certificates due in 2027.
The developer is offering to buy back the outstanding 2027 certificates, issued by Arada Sukuk Limited, at face value, according to the tender offer announcement published on Tuesday. The certificates were originally sold for $500 million.
The new issue is a fixed-rate benchmark sukuk sold under Regulation S, Reuters reported. Global investor calls began on October 20.
Arada will not buy any of the 2027 certificates unless the new sukuk is priced and settled. The maximum amount it will accept in the tender equals the size of the new issue minus $200 million, a figure the company can change before the results are announced.
The tender offer expires at 4 p.m. London time on October 26, with settlement expected on November 2. Emirates NBD Capital, Mashreqbank and Standard Chartered Bank are the dealer managers.
Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, Mashreqbank and Standard Chartered Bank are joint global coordinators on the new sukuk. Arab Bank, Arqaam Capital, Bank ABC, Goldman Sachs International, J.P. Morgan, Sharjah Islamic Bank and Warba Bank are also joint lead managers and bookrunners.
The new certificates are expected to be rated B1 by Moody’s and BB- by Fitch. Arada itself is rated B1 by Moody’s and B+ by Fitch, both with a negative outlook.
The sukuk will be listed on the London Stock Exchange’s International Securities Market and on Nasdaq Dubai.
Holders of the 2027 certificates approved a change on September 17 that gave Arada an optional right to redeem them early, according to the announcement.
Arada, founded in 2017, is Sharjah’s largest real estate developer. On Monday it launched a Saudi unit with access to a land portfolio in Riyadh, Jeddah and Makkah valued at SR50 billion ($13.3 billion).
