Sharjah-based Arada Developments has raised $400 million from a five-year US dollar sukuk, the first new public debt sale by a UAE real estate developer since the US-Iran war began in February, Zawya reported.
The Islamic certificates carry a coupon of 8.875% and were priced at a yield of 9%, or 407.4 basis points over US Treasuries.
Orders topped $650 million, about 1.6 times the size of the issue. Demand allowed the yield to tighten by about 37.5 basis points from initial guidance of around 9.375%.
Arada is rated B1 by Moody’s and B+ by Fitch, both with a negative outlook.
Part of the proceeds will refinance existing debt. Arada is offering to buy back up to $200 million of its $411.7 million of sukuk due in 2027, under a tender offer launched on October 20 alongside the new issue.
The maximum amount Arada will accept in the tender equals the size of the new issue minus $200 million. The offer expires at 4 p.m. London time on October 26, with settlement expected on November 2.
The new certificates are to be listed on the London Stock Exchange’s International Securities Market and on Nasdaq Dubai.
The sale comes days after Arada entered Saudi Arabia with a SR14 billion residential community in Riyadh.
Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, Mashreqbank and Standard Chartered Bank were joint global coordinators on the deal.
