US-based asset manager Apollo invests $500m in Aldar Properties

Deal is one of the region’s largest corporate hybrid private placements

Aldar headquarters in Abu Dhabi. The issuance of hybrid notes will provide Aldar with long-term capital. Victor Besa / The National

Aldar Properties, Abu Dhabi’s biggest listed developer, has raised $500 million through a private placement with US asset management firm Apollo Global Management.

The money was raised through subordinated hybrid notes, the developer said in a statement on Friday.

The issuance to Apollo-managed affiliates, funds and clients replaces a land joint venture that was part of the asset management firm’s initial $1.4 billion investment into Aldar in 2022.

This brings aggregate investment in Aldar led by Apollo to approximately $1.9 billion across four transactions since 2022.

Aldar claimed the transaction represents one of the region’s largest corporate hybrid private placements, which enhances its capital resilience and is “value accretive for shareholders”.

“The transaction provides Aldar with long-term, flexible capital that contributes to our balance sheet strength as we continue to capitalise on attractive growth opportunities. Our partnership with Apollo continues to play a key role in driving our expansion,” Faisal Falaknaz, group chief financial and sustainability officer at Aldar, said.

Earlier this month, Aldar Properties raised Dh9 billion ($2.45 billion) in a sustainability-linked revolving credit facility from a syndicate of 15 UAE-based and international lenders.

The five-year facility boosted Aldar’s liquidity position to nearly Dh27 billion and incorporated both conventional and Islamic tranches across the UAE dirham and US dollar currencies.

The developer also raised $500 million through its debut green Islamic bond in 2023 as part of its sustainability agenda.

Aldar also raised $1 billion this month through a hybrid bond issuance. Victor Besa / The National

This month, Moody’s reaffirmed Aldar’s Baa2 credit rating with a stable outlook.

The hybrid notes issued to Apollo share characteristics of a recent $1 billion public issuance by Aldar, with a longer non-call period of 10.25 years.

In August 2022, Apollo-managed funds and clients invested $1.4 billion in Aldar, including a $400 million equity investment in Aldar Investment Properties.

The Abu Dhabi developer raised $1 billion this month through a hybrid bond issuance, which received strong interest from regional and international investors. The order book for the hybrid bond exceeded $4.9 billion from global institutional investors and the issuance was oversubscribed 3.8 times.

The funds raised will be used to acquire more land, expand Aldar’s portfolio, and make strategic acquisitions.

The hybrid bond, which blends features of debt and equity, offers an initial yield of 6.625 per cent and cannot be redeemed for 7.25 years.