Sharjah's Arada closes $400 million sukuk, oversubscribed 3.5 times

Sharjah developer Arada has completed issuing its second public financing deal, a $400 million Sukuk, which has been listed on the London Stock Exchange and the Nasdaq Dubai. This is the first issuance under Arada’s newly established $1 billion Sukuk programme.

The five-year fixed-rate RegS Sukuk issuance was priced at par with a coupon of 8.000 per cent, inside the initial guidance area of 8.675 per cent, for a spread of 355 bps over US Treasuries.

The trade achieved one of the highest price tightening by a real estate issuer from the GCC, and also priced with a spread which is more than 150bps inside the previously priced debut Sukuk.

The sukuk issuance saw strong demand from regional and international investors, with a subscription order book of $1.45 billion, 3.5 times the offer size.

Prince Khaled bin Alwaleed bin Talal, Vice Chairman of Arada, said: “We are pleased to have enjoyed a successful return to the market with the closure of our second sukuk. This landmark issuance is once again a testament to the strong level of interest from institutional investors around the world in Arada’s stable track record, good governance and compelling growth story.”

Investor interest in the sukuk was diversified geographically, coming from Europe, the Middle East, and Asia. The investors for this issuance include institutional investors, fund managers, High-Net-Worth Individuals (HNWIs), and banks.