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Real estate developer Damac priced its USD 750 mn senior unsecured Reg S sukuk, which is set to be listed on Euronext Dublin, Zawya reports. The 3.5-year sukuk is priced at T+268.9 bps, offering a 4.25% coupon. The final pricing was tightened to a 7% yield, down from initial price thoughts (IPTs) of around 7.5%.
Background: Damac tapped advisors earlier this week to organize fixed income investor calls to be followed by a 3.5-year benchmark Reg S, USD-denominated, senior unsecured sukuk offering. The developer previously said it would rely on borrowing from banks, financial institutions, or bonds to finance 60-70% of its planned USD 20 bn investments in US data centers.
The sukuk attracted strong investor interest, with the order book exceeding USD 2.1 bn, reflecting a 2.8x oversubscription, excluding joint lead manager interest. Damac reportedly received a Ba2 rating from Moody’s with a positive outlook and a BB rating from S&P with a stable outlook.
ADVISORS- Emirates NBD Capital, HSBC, and JP Morgan were appointed as joint global coordinators and joint bookrunners, and our friends at Mashreq, alongside Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Dubai Islamic Bank, Goldman Sachs International, and Warba Bank as joint bookrunners.
Damac’s sukuk issuance follows a series of Reg S issuances from regional banks. Earlier this month, Abu Dhabi Commercial Bank raised USD 600 mn through a five-year floating-rate Formosa bond at SOFR +105 bps, while First Abu Dhabi Bank priced USD 750 mn in senior unsecured notes in January, listed in Taipei and London at SOFR +100 bps. Aldar Properties also issued USD 1 bn in Reg S hybrid capital notes — marking the largest conventional hybrid issuance in the Middle East, with USD 4.9 bn in orders (3.8x oversubscription). A USD-denominated Reg S issuance is a subordinated USD-based financial instrument offered to non-US investors.
More to come: Emirates NBD is set to issue USD 1 bn in Reg S additional tier 1 capital securities next week, with initial price thoughts of 6.25%, while Sharjah Islamic Bank plans to list a USD 500 mn five-year sukuk, with initial pricing at T+1.25%.
