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Arada successfully closes $100 million tap of Sukuk issuance, following strong investor interest

News: October 21, 2022
  • Concluded deal follows debut $350 million issuance in June
  • Sukuk rated BB- by Fitch and B1 by Moody’s

Arada has successfully closed a $100 million tap of its existing $350 million Sukuk, which was issued in June and listed on the London Stock Exchange. The tap was priced at 99 cents on the dollar, with an investor yield of 8.386%.

Arada’s existing five-year fixed rate RegS debut Sukuk issuance was rated BB- by Fitch and B1 by Moody’s.

Ahmed Alkhoshaibi, Group CEO of Arada, said: “Arada continues to expand at an extremely rapid pace. To maintain that aggressive growth strategy, we took the decision to tap the markets opportunistically to secure the capital that will guarantee our plans remain on track.

“This exceptional response and oversubscription from the international debt capital markets is a further sign of faith in Arada’s impressive growth trajectory, fundamentals and future prospects. We’re especially pleased to have closed this issuance during an uncertain time for global markets, which is again a hugely positive endorsement of our investor proposition, good governance record and credit strength.”

The tap witnessed resilient demand from the global finance markets, with a lead order of $185 million. The proceeds from the tap will be used for general corporate purposes and to support the development of Arada’s existing projects.

The Joint Lead Managers and Bookrunners for the tap were Standard Chartered Bank and Emirates NBD Capital, HSBC, Abu Dhabi Commercial Bank, Mashreq, Sharjah Islamic Bank, Kamco Invest, and Warba Bank.

In May, Moody’s and Fitch assigned Arada first-time credit ratings, of B1 and B+ respectively, both with a stable outlook.

Since its launch in 2017, Arada has launched three successful master-planned projects in Sharjah, with a combined sales value of AED33.5 billion, which are setting a new standard for integrated community living in the Emirate. In January this year, Arada announced the purchase of a plot of land on Dubai’s The Palm Jumeirah luxury megaproject, in line with the company’s stated intention to diversify into new markets.

The developer is on track for a year-on-year 25% increase in the value of property sold in 2022 to AED3 billion and is also aiming to complete 4,000 homes during the course of the year. In total, Arada has sold nearly 11,000 units since inception, valued at over AED8 billion. The developer has completed 2,600 units, with another 27,500 homes in the pipeline.