Abu Dhabi real estate firm owned by ruling family sells sukuk in dollars

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DUBAI, July 5. (Reuters) – The Private Department of Sheikh Mohamed Bin Khalid Al Nahyan LLC (PD), a relatively small real estate player in Abu Dhabi owned by members of his ruling family, hired banks to debut the sale of the U.S. dollar-denominated sukuk, or Islamic bonds. showed the document on Monday.

The company, which owns a portfolio 90% of which is in the capital of the United Arab Emirates and the rest in neighboring Dubai, has hired Emirates NBD Capital. (ENBD.DU) and First Abu Dhabi Bank (FAB.AD) as global coordinators.

Commercial Bank of Abu Dhabi (ADCB.AD), Islamic Bank of Dubai (DISB.DU) and Mashrek (MASB.DU) will join them in organizing telephone conversations with investors, starting on Monday, according to a document from one of the banks.

This will be followed by a five-year sale of sukuk, depending on market conditions. The proceeds will go towards financing capital expenditures and acquisitions, according to a report by S&P Global Ratings.

The agency assigned PD a long-term issuer rating of sub-investment grade ‘BB’, constrained by “limited portfolio size in the fragmented and weak Abu Dhabi real estate market and high leverage,” but “supported by good asset quality, geographic advantage and strong shareholders.”

The properties under development are expected to drive revenue growth of 4% to 5% this year and 25% to 30% in 2022. Its portfolio “will remain small in a regional context” despite additions and potential acquisitions, S&P said.

The real estate market in the United Arab Emirates – a significant component of the country’s gross domestic product – was hit last year by the coronavirus crisis, when prices in Abu Dhabi and Dubai plummeted.

“The real estate market in Abu Dhabi is at the bottom of the cycle, which could slow the company’s growth,” – said the S&P.

(1 USD = 3.6728 UAE dirhams)

Report by Yusef Saba; Edited by Himani Sarkar and David Evans

Our standards: Thomson Reuters Trust Principles.



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