UAE retailer Majid Al-Futtaim eyes at least $500 million from hybrid bond

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After acquiring 25 percent stake in Carrefour’s regional venture for 530 million euros, Majid Al-Futtaim Holding plans to raise money from perpetual hybrid bonds to finance the deal, its CEO Iyad Malas told Al Arabiya on the sidelines of the World Economic Forum in Jordan on Sunday.

Hybrid bonds are a mixture of debt and equity, and as a result, investors would expect to be paid a higher interest rate for the additional risk, than for a secured, senior bond issue.

Reuters reported that the issue size expected will be benchmarked, typically at least $500 million for investment-grade borrowers.

The bonds will not have a maturity date, Malas said. While the bonds being issued are perpetual, they will have a call feature after 10 or 25 years, he added.

Investors in bonds that have a call characteristic can receive a notice from their issuers stating that their principal is going to be refunded at a specific date.

Majid Al-Futtaim Holding, which saw its sales going up by more than 10 percent in Q1 this year, also seeks to buy part of the Spinneys supermarket chain.

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