Arada Gears Up for Sukuk offering

Sharjah's leading property developer, Arada Developments, is readying to launch its first new issuance of Islamic bonds (sukuk) in two years, according to a report from fixed income news service IFR on Thursday.

The dollar-denominated sukuk offering will see Arada reconnect with investors after its well-received debut in the sukuk market two years ago. This time, the company has enlisted a consortium of financial institutions to manage the issuance process. Abu Dhabi Commercial Bank, Dubai Islamic Bank, Emirates NBD Capital, and Standard Chartered Bank will serve as Joint Global Coordinators. They'll be joined by a broader group encompassing Arab Bank, Al Rajhi Capital, Kamco Invest, Mashreq, RAK Bank, Sharjah Islamic Bank, and Warba Bank, who will act as Joint Lead Managers and Bookrunners.

The planned issuance is structured as a five-year senior unsecured Reg S sukuk, catering to international investors under Regulation S of the U. S. Securities Act. The instrument is anticipated to carry ratings of B1 by Moody's and BB- by Fitch, signifying a moderate level of credit risk.

The news comes on the heels of Arada awarding significant contracts valued at over $400 million for the final phases of its expansive Masaar development project in Sharjah's Suyoh district. The project, with a total value of $9. 5 billion, is envisioned as a woodland megaproject, offering a unique living environment.

Analysts suggest that Arada's decision to return to the sukuk market reflects the company's confidence in its financial standing and future growth prospects. The proceeds from the issuance are expected to bolster Arada's war chest for further development projects, potentially expediting ongoing initiatives or enabling them to take on new ventures.

The issuance timeline indicates a swift approach. A global investor call is scheduled alongside a series of fixed income investor calls and meetings, commencing on the very day the mandate was announced. This rapid mobilization suggests Arada's eagerness to capitalize on favorable market conditions and secure the desired funding.

The issuance serves as a significant development for Sharjah's financial landscape. Arada, as a prominent player in the emirate's real estate sector, is demonstrably leveraging Islamic finance instruments to fuel its ambitious development goals. The success of this issuance could pave the way for similar endeavors by other Sharjah-based companies, potentially deepening the emirate's participation in the Islamic finance market.

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