Emirates REIT, one of the world’s largest listed Shariah-compliant real estate investment trusts, has agreed to fully refinance its existing Sukuk, due December 2025, with a new U.S.$205 million Sukuk due Dec 2028. The new Sukuk is rated BB+ by Fitch.
The new Sukuk carries a profit rate of 7.5% in years 1-3 with a step up to 8.25% in year 4.
The issuance of the new Sukuk remains subject to customary closing conditions.
HSBC acted as the lead arranger through its Private Credit and Debt Capital Markets teams.
The lower cost of the new financing reflects Emirates REIT’s solid credit profile, strong cash flow generation and operational performance – all evidenced in the assigned BB+ credit rating.
Thierry Delvaux, CEO of Equitativa (Dubai) Ltd, the REIT manager, commented: “Over the past year, Emirates REIT has reduced its outstanding financings by over U.S.$190 million, bringing its Financing to Value ratio below 26%. This, combined with its strong operating results, allowed the REIT to obtain our target rating for the new Sukuk of BB+.
The positive reaction from both domestic and international investors to the new Sukuk issuance is a clear testament to the quality of the REIT’s assets, and the REIT manager’s strategy.
With the refinancing now firmly in place, our efforts will focus on capitalizing on Dubai’s dynamic growth to create shareholder value.”
Latham & Watkins acted as counsel to Emirates REIT and White & Case acted as counsel to HSBC Bank plc.
