UAE developer Binghatti Holding prices $500mln 5-year sukuk

Binghatti Holding marginally tightened the price on its $500 million Reg S 5-year benchmark sukuk to a profit rate of 8.125%, equivalent to a spread of 418 basis points over US Treasuries.

The initial price guidance was in the 8.500% area

The UAE developer, rated Ba3 by Moody’s (Stable) and BB- by Fitch (Stable), saw its issuance oversubscribed five times, with an order book exceeding $2.5 billion. The company said its issuance attracted strong regional and international investor demand.

The sukuk will be issued under Binghatti’s $1.5 billion Trust Certificate Issuance Programme and listed on both, the Nasdaq Dubai and the London Stock Exchange.

Abu Dhabi Islamic Bank, Dubai Islamic Bank, Emirates NBD Capital, HSBC and Mashreq were appointed as Joint Global Coordinators and, together with Abu Dhabi Commercial Bank, Ajman Bank, Arqaam Capital, First Abu Dhabi Bank, RAKBANK, Sharjah Islamic Bank and Warba Bank, as Joint Lead Managers and Joint Bookrunners.

Last year, the real estate developer turned to the debt markets with its inaugural $300 million sukuk in February, followed by a $200 million sukuk tap in July that took the overall deal size to $500 million.

The issuance by Binghatti is the latest in a growing number of property developers tapping debt markets to capitalise on a construction boom in the GCC. In recent months, several developers including Omniyat, Damac, and the Abu-Dhabi based Aldar Investment Properties have tapped debt markets with sukuk issuances.

Earlier this week, Sharjah’s Arada Developments also launched its $450 million sukuk with a coupon of 7.150%.