Aldar issues $500m perpetual subordinated notes to US asset manager Apollo

Issuance is part of Apollo’s $1.4bn investment in Abu Dhabi's biggest listed developer

Aldar headquarters in Abu Dhabi. The company reported a robust rise in 2021 income on record development sales. Khushnum Bhandari / The National
Beta V.1.0 - Powered by automated translation

Aldar Investment Properties, a subsidiary of Abu Dhabi’s biggest listed developer Aldar Properties, issued $500 million perpetual subordinated notes to Apollo Global Management — one of the world’s largest alternative investment managers.

Part of Apollo’s $1.4 billion investment into Aldar’s growth initiatives, the subordinated perpetual notes are priced at a coupon of 5.625 per cent for an initial non-call period of 15 years, Aldar said in a statement on Thursday.

“The terms of this ground-breaking issuance reflect the unique strength of Aldar's best in class investment property platform,” said Greg Fewer, chief financial and sustainability officer at Aldar Properties.

“Our long-term strategic partnership with Apollo will accelerate Aldar’s transformative growth agenda, allowing us to build significant scale and enhance diversification of our high-quality portfolio of income-generating assets,” he added.

The perpetual subordinated notes are the first to be issued by Aldar and the largest corporate hybrid private placement in the Middle East and North Africa region, with the longest non-call period, the company said.

Apollo’s investment into Aldar, which was announced last month, allocates $500m to a land joint venture, $500m to perpetual subordinated notes, $300m in mandatory convertible preferred equity investment in Aldar Investment Properties and $100m in common equity investment in Aldar Investment Properties.

The property market in the UAE, the second-biggest Arab economy, has made a strong recovery from the pandemic-induced slowdown amid business and social reforms as well as government stimulus measures.

The capital values of villas and apartments in Abu Dhabi rose to their highest level in five years in the fourth quarter of 2021, underpinned by a broader economic recovery, property consultancy ValuStrat said.

On Wednesday, Moody's Investors Service affirmed Aldar Investment Properties' Baa1 rating, the highest credit rating for a non-government company in the region, on the back of its expanding portfolio of diversified investment properties.

Updated: March 24, 2022, 5:39 PM