DUBAI, July 7 (Reuters) – The private department of Sheikh Mohamed Bin Khalid Al Nahyan LLC (PD), a relatively small real estate player in Abu Dhabi owned by members of his ruling family, has sold $ 350 million in bonds Islamic five years on Wednesday at 5.5%, according to a document.
Sukukes have been tightened from initial price forecasts by around 5.75% after orders over $ 900 million, according to the document from one of the banks.
The company, which has a portfolio that is 90% concentrated in the UAE capital and the rest in neighboring Dubai, will use the proceeds to fund capital spending and acquisitions, S&P Global Ratings said.
Two sources familiar with the matter had told Reuters that the sukuk would largely refinance existing loans, with one adding that the sale would likely be around $ 500 million. Read more
The Gulf rarely sees private companies tapping into international debt markets, and one of the sources said the deal would pave the way for new issuers.
The company is expected to return to the debt markets with the objective eventually being to issue medium and long-term debt, the source said.
The UAE’s real estate market – an important component of the country’s gross domestic product – suffered last year amid the coronavirus crisis, as prices in Abu Dhabi and Dubai fell sharply.
S&P assigned PD a long-term issuer rating of ‘BB’ quality, limited by its’ limited portfolio size in a fragmented and weak Abu Dhabi real estate market and high leverage ‘, but’ supported by good asset quality, a geographic advantage and a strong shareholder base. “
PD said in an investor presentation reviewed by Reuters that its “strong relationship with the government of Abu Dhabi” gave it priority assistance in receiving rezoning and planning approvals, as well as support, financial contributions and in nature and other benefits.
Emirates NBD Capital (ENBD.DU) and First Abu Dhabi Bank (FAB.AD) acted as global coordinators, while Abu Dhabi Commercial Bank (ADCB.AD), Dubai Islamic Bank (DISB.DU) and Mashreq (MASB .DU) were also involved in the case.
Reporting by Yousef Saba; Editing by Christopher Cushing and Elaine Hardcastle
Our standards: Thomson Reuters Trust Principles.
