Dubai: Majid Al Futtaim, the retail and real estate giant, launched the Middle East’s first corporate green Sukuk Wednesday morning, listed on the Nasdaq stock exchange in Dubai and valued at $600 million (Dh2.20 billion).
A Sukuk is similar to a Sharia-compliant bond.
Alain Bejjani, the company’s chief executive, rang the opening bell at 10am on Wednesday morning to celebrate the listing.
Speaking to the media after the market opened, Bejjani said that despite regional volatility, the company was keen to continue raising capital.
“This is something we’ll be doing more of at the right, and in the right circumstances,” Bejjani said. “It is an important addition to our arsenal, and it’s something we’ll be using more often whenever it makes sense.
When asked if Majid Al Futtaim would be looking to issue another green Sukuk in the coming years, the CEO said that the company would do so at the right time, but did note that there was a strong appetite for further capital raising within the company.
Bejjani said the Sukuk was more than six times oversubscribed from a widespread investor base, allowing Majid Al Futtaim to tighten the interest rates on the 10-year note.
A third of investors were from Asia, he added.
The investment will be used to finance and refinance Majid Al Futtaim’s existing and future green projects, including green buildings, renewable energy, sustainable water management, and energy efficiency, the company said.
On the pricing of the Sukuk, the CEO said that the note had benefited from a wide investor base.
“The point is, of course, when you have a wider investor base, you can actually have more ability to tighten your spread,” he said.
“So it’s not that we do it at a lower cost because it is a green Sukuk,” Bejjani said, adding: “It’s actually because there’s a big belief globally within the business, and we’ve been able to tap in to a community of investors who are committed to a green business that gave us another dimension, and that allows us to negotiate better the cost of this issuance.”
With its latest issuance, the value of all debt instruments listed on Nasdaq Dubai by Majid Al Futtaim has reached $2.4 billion. The company’s other listings include one Sukuk of $500 million that listed in 2015, and two conventional bonds of $500 million each that listed in 2013 and 2014 respectively.