Aldar Investment Properties plans 10-year sukuk to refinance debt

Company is embarking on a roadshow with investors in the Middle East, Europe and Asia to gauge demand

Aldar has mandated Dubai Islamic Bank, First Abu Dhabi Bank, HSBC and Standard Chartered Bank to lead the sukuk deal. Christopher Pike / The National Reporter

Aldar Investment Properties, a fully-owned subsidiary of Abu Dhabi's biggest listed developer, plans to issue a 10-year, dollar-denominated sukuk to refinance its debt.

Aldar Properties has embarked on a series of fixed income investor meetings in Europe, Asia and the Middle East starting from October 10, it said in a statement on the Abu Dhabi Securities Exchange, where its shares trade.

The company has mandated Dubai Islamic Bank, First Abu Dhabi Bank, HSBC and Standard Chartered Bank to lead the potential deal. Other banks involved in the transaction include Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Emirates NBD Capital and Sharjah Islamic Bank.

Proceeds of the intended issue will be used to refinance existing debt and the offer is expected to be priced on October 15, subject to market response, with the results being announced as soon as reasonably appropriate, Aldar said. Aldar Investment was launched in September last year with a portfolio of Dh20 billion of revenue-generating assets.

About 5,000 residential units and 500,000 square metres of retail and commercial space were transferred into the new vehicle, along with Dh6bn of existing debt.

The wholly-owned asset management arm of Aldar Properties also subsequently took full ownership of Etihad Plaza and Etihad Airways Centre in a Dh1.2bn deal in February and took possession of the Al Jimi Mall extension in Al Ain in March. The company's portfolio has an occupancy rate of about 90 per cent.

Aldar Investment is rated Baa1 by Moody's.

The sukuk market is expected to witness its fourth consecutive annual increase this year, with total issuance reaching about $130bn, ratings agency Moody's Investors Service forecast in August. It said total sukuk volumes grew to $87.4bn in the first half of the year, from $64bn in the same period of 2018.