Arada closes USD 450 mn sukuk issuance: Sharjah-based real estate developer Arada closed a Reg S USD 450 mn, 5-year sukuk issuance, which has been listed on the Nasdaq Dubai and the London Stock Exchange, according to a statement. Arada was reportedly looking to raise USD 500 mn from the sukuk.

The details: The issuance was priced with an annual investment yield of 7.150%, which is lower than the initial price guidance of 7.625 – 7.750%, and 317 basis points over US Treasury bonds. This represents the narrowest reoffer spread Arada has ever achieved. The issuance received a rating of BB- from Fitch and B1 from Moody’s credit rating agency.

The issuance was 4x oversubscribed: The subscription book came in at over USD 2 bn for the issuance, approximately 4x the offer size, with participation from regional and international investors including banks, asset managers, investment funds, and hedge funds from Europe, the Middle East, and Asia.

Arada last hit the sukuk market in 2024: The property developer completed a USD 150 mn tap into an existing USD 400 mn sukuk issuance on both the London Stock Exchange and Nasdaq Dubai in September of last year, bringing the total issuance to USD 550 mn.

Where will the new funds go? Last week, Arada said it was set to launch a tender offer to buy back up to USD 100 mn of its existing sukuk due in 2027. The offer had a purchase price of 102.75% of the nominal value and will remain open until Thursday, July 31. The remaining amount will be allocated for the company’s general corporate purposes.

ADVISORS- Arab Bank, Arqaam Capital, Bank ABC, Rakbank, Sharjah Islamic Bank, and Warba Bank acted as joint lead managers and bookrunners. Our friends at Mashreq, Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, and Standard Chartered Bank acted as joint global coordinators for the issuance.

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