Real Estate Developer Issues Largest Green Sukuk

Sobha Realty has successfully closed a $750 million Green Sukuk issuance, marking the largest in its history and the biggest globally for a real estate developer. The five-year Islamic bond, issued under a $1.5 billion program, will be listed on both the London Stock Exchange and Nasdaq Dubai. The issuance saw strong demand, with the order book reaching $2.1 billion, nearly three times the offering size, leading to a tightening of pricing by 50 basis points. The Sukuk was priced at a profit rate of 7.125% per annum, with an effective yield of 7.375%.

The proceeds from the Sukuk will be used to fund or refinance projects that meet Sobha Realty's Green Financing Framework criteria. This framework adheres to international standards, including the ICMA Green Bond Principles and the LMA Green Loan Principles. DNV provided an independent Second Party Opinion, confirming alignment with market best practices. The Sukuk is expected to receive credit ratings of Ba2 (Stable) from Moody’s and BB (Stable) from S&P.

Regional investors took up 56% of the allocation, with the remaining 44% going to international participants. The issuance involved a consortium of financial institutions, with Dubai Islamic Bank, Emirates NBD Capital, J.P. Morgan Securities, Mashreqbank, and Standard Chartered Bank acting as Joint Global Coordinators. A wider group of 13 banks also participated as Joint Lead Managers and Bookrunners. Deutsche Bank and Emirates NBD Capital also served as Joint ESG Structuring Coordinators.