Abu Dhabi's Aldar Properties hires banks for US$750m sukuk refinancing - sources

[DUBAI] Aldar Properties, the state-linked builder of Abu Dhabi's Formula One circuit, has hired banks to arrange a US dollar-denominated sukuk issue of at least US$750 million, sources familiar with the matter said.

The company has mandated JPMorgan, Standard Chartered, and First Abu Dhabi Bank for the debt sale, said the sources. Other banks, including Dubai Islamic Bank , will also have a role in the deal, said the sources.

The issue will refinance a US$750 million outstanding sukuk, or Islamic bond, due in December this year. The size of the transation could increase, depending on demand, one of the sources said.

Aldar, JPMorgan, Standard Chartered and First Abu Dhabi Bank declined to comment. Dubai Islamic Bank did not immediately respond to a request for comment.

Aldar, Abu Dhabi's largest developer, reported last month a 28 per cent fall in second-quarter profit attributing it to a revaluation of properties related to its retail portfolio.

A sluggish economy and property market in the oil-rich capital of the United Arab Emirates has depressed values and rentals in the last two years.

Still, Aldar is optimistic, following a 50 billion dirhams (S$18.7 billion) stimulus plan announced by Abu Dhabi in June.

The developer reported a net profit attributable to owners of 446.5 million dirhams in the three months to June 30.

The planned sukuk, which could be announced next week, would add to a growing pipeline of Islamic bonds being prepared in Abu Dhabi. Both Abu Dhabi Islamic Bank and Al Hilal Bank have been meeting investors since last week for planned sukuk sales.

ADIB is aiming to issue an Additional Tier 1 perpetual non-call five year Sukuk, while Al Hilal Bank is looking to issue a five-year dollar sukuk. Both transactions are expected to be of benchmark size, which generally means upwards of US$500 million. 

REUTERS