Arada Developments LLC, “Arada”, the Sharjah-based master developer, has made a strong return to global debt markets with the successful closure of a $450 million five-year Sukuk, listed on both the London Stock Exchange and Nasdaq Dubai. The issuance was oversubscribed more than four times, with the order book peaking above $2 billion, excluding Joint Lead Managers, highlighting intense demand from global and regional investors.
Rated B1 by Moody’s and B+ by Fitch, Arada’s RegS Sukuk was ultimately priced at a coupon of 7.150%, significantly tighter than the initial price guidance of 7.625%-7.750%. This reflects a compression of 47.5bps to 60bps, achieving a spread of 317 basis points over US Treasuries, marking the tightest reoffer yield Arada has ever achieved.
The company plans to use the proceeds to fund a tender offer of up to $100 million for its existing 2027 Sukuk, with the remaining proceeds allocated for general corporate purposes. Commenting on the overwhelming investor response, Ahmed Alkhoshaibi, Group CEO of Arada, told The Finance 360, “Since issuing our first sukuk in 2022, Arada has established an excellent track record with the global investor community, which is backed by strong credit ratings and a clear trajectory of sustainable growth. We now have a project pipeline valued at over AED90 billion in the UAE and Australia, and have achieved a tripling of sales in the first half of this year alone. Institutional investors, including sovereign and asset managers, private banks and hedge funds from Europe, the Middle East, and Asia, backed the transaction enthusiastically, demonstrating broad-based confidence in our paper.”
“Initial price guidance of 7.625-7.750% was tightened to the 7.250% area and was finally priced at 7.150%, a very favourable pricing outcome that reflects both an attractive funding structure and investor appetite for premium issuers in the real estate sector. The depth of demand helped compress pricing to a spread of 317 bps over U.S. Treasuries, which is the tightest reoffer yield Arada has ever achieved. This marks a direct reflection of confidence in Arada’s financial strength, governance standards, and growth outlook,” Alkhoshaibi added.
The investor base for this issuance was diversified across Europe, the Middle East, and Asia, and included banks, private banks, asset managers, and hedge funds, reaffirming Arada’s growing appeal beyond regional borders.
“Recent issuances have seen a trend towards greater participation from international investors, as the Arada growth story has become better known. The order book drew from investors across Europe, the Middle East, and Asia, with profiles ranging from banks and asset managers to hedge funds and private banking platforms. This geographic diversity reinforces the message that Arada is viewed as a high-quality issuer with a compelling development pipeline and operational clarity. It underlines global trust in Arada’s strategic positioning and long‑term growth story,” Alkhoshaibi noted.
The transaction was jointly coordinated by a syndicate of leading financial institutions. Joint Global Coordinators included Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, Mashreq, and Standard Chartered Bank. Joint Lead Managers and Bookrunners included Arab Bank, Arqaam Capital, Bank ABC, RAK Bank, Sharjah Islamic Bank, and Warba Bank.
HRH Prince Khaled bin Alwaleed bin Talal, Executive Vice Chairman of Arada, said, “Our latest successful return to the global markets reflects once again the trust being placed by regional and international investors in Arada’s track record, robust financial position and growth prospects. This issuance serves as a platform of our next phase of growth as we continue to target growth opportunities both at home in the UAE and abroad.”
