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Arada Developments successfully secured $450 million through its five-year sukuk issuance, marking a notable return to the international debt market, with demand surpassing four times the expected amount.
The RegS Sukuk was issued with a fixed coupon rate of 7.150%, attracting peak orders exceeding $2 billion, not accounting for the joint lead managers.
This transaction was priced 47.5 to 60 basis points below the initial guidance of 7.625% to 7.750%, concluding with a spread of 317 basis points over US Treasuries.
The sukuk has received a rating of BB- from Fitch and B1 from Moody’s, and it is now listed on both the London Stock Exchange and Nasdaq Dubai.
The funds raised will be used in part to conduct a tender offer of up to $100 million for Arada’s existing 2027 Sukuk, with the remaining portion allocated for general corporate needs.
Interest from Investors Across Europe, the Middle East, and Asia
Prince Khaled bin Alwaleed bin Talal, Executive Vice Chairman of Arada, noted that the impressive response from investors reflects confidence in the company’s achievements and future outlook. “Our successful return to global markets demonstrates the trust that both regional and international investors place in Arada’s proven track record, strong financial standing, and growth potential,” he stated.
The sukuk garnered widespread interest from investors across Europe, the Middle East, and Asia, including banks, private banks, asset managers, hedge funds, and various institutional investors.
The joint global coordinators for this issuance were Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, Mashreq, and Standard Chartered. The joint lead managers and bookrunners included Arab Bank, Arqaam Capital, Bank ABC, RAK Bank, Sharjah Islamic Bank, and Warba Bank.
Founded in 2017, Arada has successfully delivered over 10,000 units and sold more than 17,000 homes valued at approximately Dhs29 billion.
The company’s project pipeline, which spans the UAE and Australia, has a total estimated value exceeding Dhs90 billion.
Read: Exploring Arada’s Expansion in the Luxury Property Sector of the UAE