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UAE’s Arada Developments hires banks for debut dollar sukuk: Report

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Arada Developments, the largest developer in the UAE’s Sharjah, has hired banks to arrange a debut sale of US dollar-denominated Islamic bonds, a document showed on Tuesday.

Dubai Islamic Bank Emirates NBD Capital and Standard Chartered Bank were hired as joint global coordinators.

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They are joined by Abu Dhabi Commercial Bank, Ajman Bank, Al Rajhi Capital, Kamco Invest, Mashreq, Sharjah Islamic Bank and Warba Bank as joint lead managers and bookrunners, the document from one the banks showed.

They will hold investor calls between Tuesday and next Monday, which will be followed by the issuance of benchmark size five-year sukuk, subject to market conditions.

The Dubai-neighboring emirate’s largest real estate developer, set up in 2017, is rated B1 by Moody’s and B+ by Fitch.

Arada is 40 percent owned by Basma Group, which is owned by Sheikh Sultan bin Ahmed al-Qasimi, Sharjah’s deputy ruler, and 60 percent held by Corp KBW Investments, which is owned by Prince Khaled bin Alwaleed, a member of the Saudi royal family.

“The Sharjah government provided a guarantee for up to $436mn loan that Arada obtained for the Aljada land payment,” Arada said in an investor presentation, reviewed by Reuters, in which it touted “proven support from the government & regulatory authorities.”

Arada also said it has “access to premium land allotment with flexible payment plans.” Aljada is the largest integrated development in the emirate and the developer said it can repay the loan over 16 years from project cash flows.

At the end of 2021, Arada had $251 million in debt, of which $118.68 million matures this year, and $128 million in cash, the presentation showed. A further $84.11 million in debt matures next year.

The company said it had a 70 percent market share of off-plan sales in Sharjah last year, up from 63 percent in 2020.

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