Sobha Realty, a luxury real estate developer based in the UAE, announced on Wednesday that it has successfully raised $750 million through its inaugural green sukuk, marking the largest sukuk issuance by a real estate developer worldwide.
This five-year sukuk, set to mature in 2030, was issued as part of the company’s $1.5 billion trust certificate issuance program.
The sukuk will be listed on both the London Stock Exchange and Nasdaq Dubai.
Investor interest for the issuance peaked at around $2.1 billion, which is 2.8 times the size of the sukuk, leading Sobha to lower the pricing by 50 basis points from the original estimates.
The sukuk was issued with a profit rate of 7.125% annually, and an effective yield of 7.375%.
56% of the allocations went to regional investors, while the remaining 44% were from international investors.
The funds raised will finance or refinance projects under Sobha’s Green Financing Framework, which complies with the Green Bond Principles established by the International Capital Market Association and the Green Loan Principles set by the Loan Market Association. This framework has obtained a second-party opinion from DNV.
“The overwhelming success of our first green sukuk reflects the market’s appreciation of Sobha Realty’s strong financial position and our steadfast dedication to sustainable development,” stated Ravi Menon, chairman of Sobha Group.
Sobha Green Sukuk Rating
The sukuk is anticipated to receive ratings of Ba2 (Stable) from Moody’s and BB (Stable) from S&P, aligning with the corporate credit rating of PNC Investments, the obligor.
Joint global coordinators for this issuance included Dubai Islamic Bank, Emirates NBD Capital, J.P. Morgan, Mashreqbank, and Standard Chartered. The joint lead managers and bookrunners comprised Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Ajman Bank, Arab Banking Corporation, Arqaam Capital, Deutsche Bank, First Abu Dhabi Bank, RAKBank, Sharjah Islamic Bank, and Warba Bank.
Furthermore, Deutsche Bank and Emirates NBD Capital served as joint ESG structuring coordinators, while Clifford Chance and Dentons provided legal advice, and Grant Thornton was engaged as the auditor.