Sobha Realty raises $750m in inaugural green sukuk

Core Insights - Sobha Realty has successfully raised $750 million through its inaugural green sukuk, marking the largest issuance by a real estate developer globally [2] - The sukuk has a five-year maturity, set to mature in 2030, and is part of a $1.5 billion trust certificate issuance program [2] - The sukuk will be listed on both the London Stock Exchange and Nasdaq Dubai [2] Investor Demand and Pricing - Investor demand for the sukuk reached approximately $2.1 billion, which is 2.8 times the issue size, allowing Sobha to tighten pricing by 50 basis points from initial thoughts [3] - The sukuk was priced at a profit rate of 7.125% per annum, with an effective yield of 7.375% [3] - Regional investors accounted for 56% of allocations, while international investors made up 44% [3] Use of Proceeds - Proceeds from the sukuk will be utilized to finance or refinance projects under Sobha's Green Financing Framework, which aligns with the International Capital Market Association's Green Bond Principles and the Loan Market Association's Green Loan Principles [4] - The framework has received a second-party opinion from DNV [4] Company Statement - The chairman of Sobha Group, Ravi Menon, emphasized that the success of the green sukuk issuance reflects the market's recognition of Sobha Realty's strong financial position and commitment to sustainable development [5] Sukuk Ratings - The sukuk is expected to receive ratings of Ba2 (Stable) from Moody's and BB (Stable) from S&P, which aligns with the corporate credit rating of the obligor, PNC Investments [6] Joint Coordinators and Advisors - Dubai Islamic Bank, Emirates NBD Capital, J.P. Morgan, Mashreqbank, and Standard Chartered served as joint global coordinators for the sukuk issuance [7] - Additional joint lead managers and bookrunners included several banks such as Abu Dhabi Commercial Bank and Deutsche Bank [7] - Deutsche Bank and Emirates NBD Capital acted as joint ESG structuring coordinators, with legal advice provided by Clifford Chance and Dentons [8]