Sobha Realty, a leading global luxury real estate developer, recently announced the successful completion of a strategic $230 million tap into its existing sukuk on September 10. The latest tap is an extension of the developer’s inaugural sukuk issuance of $300 million, which took place in July 2023 and currently has an outstanding balance of $270 million. Sobha Realty listed the issuance on both the London Stock Exchange (LSE) and NASDAQ Dubai.
With the completion of this tap, Sobha Realty’s total sukuk issuance reached a benchmark size of $500 million. The tap adheres to the existing sukuk terms, preserving favorable conditions and ensuring stability for the company’s investors.
Sobha Realty’s sukuk garnered significant interest, which led to a notable price tightening of 95 basis points, highlighting strong demand from both regional and international investors. The developer said that 25 percent of the interest came from global sources, reflecting strong confidence in Sobha Realty’s financial instruments.
The announcement follows recent upgrades from leading credit rating agencies. Standard & Poor’s upgraded Sobha Realty’s rating from BB-/positive to BB/stable, while Moody’s upgraded the developer’s sukuk rating from Ba3/stable to Ba2/stable.
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Sobha Realty appointed Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Dubai Islamic Bank, Emirates NBD Capital, Sharjah Islamic Bank and Standard Chartered Bank as joint global coordinators, joint lead managers, and bookrunners for this transaction. The company also acknowledged Clifford Chance and Dentons for their legal counsel. Additionally, Grant Thornton’s role as auditor was pivotal in ensuring the integrity and transparency of the process.
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