Sobha Realty has announced the execution of a tap into its existing sukuk on 10 September 2024. This latest tap is an extension of the Developer’s inaugural sukuk issuance of US $300mn, which took place in July 2023 and currently has an outstanding balance of $270mn. This sukuk was listed on both the London Stock Exchange (LSE) and NASDAQ Dubai.
With the completion of this tap, Sobha Realty’s total sukuk issuance now stands at $500mn. The tap adheres to the existing sukuk terms, preserving the conditions and ensuring continued stability for the company’s investors, the developer said.
Sobha Realty’s sukuk led to price tightening of 95 basis points, highlighting strong demand from both regional and international investors. 25% of the interest came from global sources, reflecting strong confidence in Sobha Realty’s financial instruments.
Sobha Realty appointed Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Dubai Islamic Bank, Emirates NBD Capital, Sharjah Islamic Bank, and Standard Chartered Bank as Joint Global Coordinators, Joint Lead Managers, and Bookrunners for this transaction. Their commitment is instrumental to its success.
The company also acknowledged Clifford Chance and Dentons for their exceptional legal counsel, which provided critical guidance throughout the transaction. Additionally, Grant Thornton’s role as auditors was ensuring the integrity and transparency of the process.
This announcement follows recent upgrades from credit rating agencies. Standard & Poor has upgraded the developer’s rating from BB-/Positive to BB/Stable, while Moody’s has upgraded its sukuk rating from Ba3/stable to Ba2/stable. These upgrades reflect strong financial results, including substantial EBITDA growth, a larger revenue backlog, and improved EBITDA margins, the developer outlined in its statement.
Sobha Realty said it is confident this strategic move will further fortify its financial position and reinforce trust with its stakeholders.