Sobha Realty, a leading real estate developer, has successfully extended its existing sukuk issuance, increasing the total value to $500 million. This marks a significant expansion of its inaugural $300 million sukuk, originally issued in July 2023, which now has an outstanding balance of $270 million. The latest tap was executed under the same favourable terms as the original issuance, ensuring continued stability for the company’s investors.
The sukuk, listed on both the London Stock Exchange (LSE) and NASDAQ Dubai, saw strong demand from regional and international investors, prompting a price tightening of 95 basis points. Approximately 25% of the investor interest came from global markets, underscoring the high level of confidence in Sobha Realty’s financial instruments.
In a statement, Sobha Realty emphasised that the increased issuance would further enhance the company’s financial position. “This strategic move is a testament to our commitment to fostering growth while maintaining transparency and security for our stakeholders. The strong demand for our sukuk reflects trust in our long-term vision,” a company spokesperson said.
Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Dubai Islamic Bank, Emirates NBD Capital, Sharjah Islamic Bank, and Standard Chartered Bank were appointed as Joint Global Coordinators, Lead Managers, and Bookrunners for this transaction. Legal counsel was provided by Clifford Chance and Dentons, while Grant Thornton acted as the auditors, ensuring transparency and adherence to regulatory standards throughout the process.
The sukuk tap comes on the back of recent upgrades from major credit rating agencies. Standard & Poor’s raised Sobha Realty’s rating from BB-/Positive to BB/Stable, and Moody’s upgraded the sukuk rating from Ba3/Stable to Ba2/Stable. These improvements reflect Sobha’s strong financial performance, including robust EBITDA growth, an expanding revenue backlog, and improved EBITDA margins.
