The largest Green Sukuk issue in Sobha Realty’s history and the largest by a real estate developer worldwide, totaling $750 million, was successfully completed.
The $1.5 billion Trust Certificate Issuance Program of Sobha was used to issue the five-year Islamic bond, which will be listed on both the London Stock Exchange and Nasdaq Dubai.
Due to the high demand for the issue, the order book grew to almost $2.1 billion, which is 2.8 times the issue size. The pricing tightened by 50 basis points from the first projection due to the significant level of interest.
The Sukuk had an effective yield of 7.375% and was priced at a profit rate of 7.125% annually. Of the allotment, 44% went to international participants and 56% went to regional investors.
How the proceeds will be used
Projects that satisfy the qualifying requirements listed in Sobha Realty’s Green Financing Framework will be financed or refinanced using the proceeds from the Sukuk. The framework adheres to globally accepted standards, such as the Green Bond Principles of the International Capital Market Association (ICMA) and the Green Loan Principles of the Loan Market Association (LMA).
DNV supplied an independent Second Party Opinion to verify compliance with industry best practices. In accordance with the ratings of the obligor, PNC Investments LLC, the Sukuk is anticipated to obtain credit ratings of BB (Stable) from S&P and Ba2 (Stable) from Moody’s.
A group of both domestic and foreign financial organizations participated in the issuance. The Joint Global Coordinators were Standard Chartered Bank, Mashreqbank, J.P. Morgan Securities, Dubai Islamic Bank, and Emirates NBD Capital.
First Abu Dhabi Bank, Deutsche Bank, and Abu Dhabi Commercial Bank were among the 13 institutions that worked together as joint lead managers and bookrunners. Additionally, Deutsche Bank and Emirates NBD Capital served as Co-Coordinators for ESG Structuring. Clifford Chance and Dentons supplied legal advice, and Grant Thornton was chosen to serve as the auditor.
The announcement coincides with the Middle East’s growing interest in sustainable finance products as businesses match their capital-raising initiatives with environmental, social, and governance (ESG) objectives.