Business | Banking
Aldar to sell debut Islamic bond
Aldar Properties PJSC, Abu Dhabi's biggest developer, plans to raise at least 3 billion dirhams to fund new projects by selling Islamic bonds, its first issue in the local currency.
- Bloomberg
- Published: 14:04 June 5, 2008
Abu Dhabi: Aldar Properties PJSC, Abu Dhabi's biggest developer, plans to raise at least 3 billion dirhams to fund new projects by selling Islamic bonds, its first issue in the local currency.
The five-year Ijarah sukuk will pay a profit distribution of 1.75 percentage points more than the three-month Emirates interbank offered rate, Aldar said in a filing to the Abu Dhabi bourse.
The developer said June 1 that the notes would pay 1.5 to 1.75 percentage points over Eibor.
Aldar is building homes, hotels, cinemas and theme parks in Abu Dhabi, owner of 8 percent of the world's proven oil reserves, as the emirate starts tourism and manufacturing projects to diversify its sources of income. First-quarter profit more than tripled to 1.37 billion dirhams as sales surged, Aldar said in April.
The developer hired eight banks including Abu Dhabi Commercial Bank PJSC, Barclays Capital, Credit Suisse Group AG and Lehman Brothers Holdings Inc. to help it sell sukuk in the United Arab Emirates currency, Aldar said last month.
State-owned Dubai Electricity & Water Authority last month sold five-year floating-rate Ijarah sukuk paying 1.25 percentage points more than Eibor, Bloomberg data show. Eibor was last at 1.8813 percent, data compiled by Bloomberg show.
Aldar has an A3 credit rating from Moody's Investors Service, its seventh-highest investment grade, and an equivalent A- rating from Standard & Poor's. The company has $3.6 billion of bonds and loans outstanding that mature in 2011, Bloomberg data show.
Muslim Shariah law forbids interest payments, so Ijarah sukuk are based on a leasing contract and pay a profit distribution to investors rather than interest.
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