UAE property developer Damac sells $400m sukuk

The issue followed a series of investor calls and meetings

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Damac Properties delisted from the Dubai stock market last year. - KT file

By Reuters

Published: Tue 18 Apr 2023, 6:52 PM

Dubai-based real estate developer Damac on Tuesday sold a three-year $400 million sukuk with a yield of 7.75 per cent, a bank document showed.

The issue followed a series of investor calls and meetings that kicked off last week for a benchmark-sized sale, understood to be at least $500 million.

The company, rated BB- by S&P, priced tighter than guidance of around 7.875 per cent released earlier as order books hit over $1.15 billion, a document from a mandated bank showed.

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Damac’s projects are targeted at the higher-end of the market as the company seeks to take advantage of a property boom in Dubai amid a strong economic recovery after the Covid-19 pandemic.

The company delisted from the Dubai stock market last year.

Gulf issuers have rushed back to debt capital markets, seeking an opportunity to capitalise on lower yields and favourable market dynamics.

Investor demand for sukuk and sustainability-linked, or green, bonds has also spurred new issues.

On Monday, Abu Dhabi National Energy Company (Taqa) raised $1.5 billion from a two tranche deal, including a $1 billion 10-year green bond.

While many issues have been sovereign, or state-linked, Damac was a test for appetite for a corporate debt issue in the private sector.

Deutsche Bank, Emirates NBD Capital and J.P. Morgan were mandated global coordinators and bookrunners, and UAE lenders Abu Dhabi Commercial Bank, Dubai Islamic Bank and Mashreq also acted as joint bookrunners on the deal.

Reuters

Published: Tue 18 Apr 2023, 6:52 PM

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