Back to all news

Tabreed Raises USD 500 million With New 7 Year Sukuk

Tuesday, October 30, 2018

Tabreed Raises USD 500 million With New 7 Year Sukuk

National Central Cooling Company PJSC (DFM: Tabreed), the leading UAE-based regional district cooling utility company, today announces it has successfully raised US$500 million (AED 1.8 billion) with a fixed rate senior unsecured US dollar denominated RegS sukuk with a 7 year tenor. The issue follows a series of fixed income investor meetings which took place in Europe and Asia, as well as in the United Arab Emirates.

 

The new sukuk, which will be listed on the London Stock Exchange, had strong institutional demand both locally and in Asia and Europe, which enabled the issue to be oversubscribed by 50%. The sukuk was competitively priced, with a profit rate of 5.5%, underpinned by Moody’s Baa3 and Fitch’s BBB credit ratings, which were announced last week. These ratings are the first to be assigned to Tabreed by Moody’s and Fitch, and have also been assigned to the sukuk itself.

 

The ratings agencies noted Tabreed’s robust and sustainable business model, the long term nature of its customer contracts and the consequent strength and resilience of its cashflows in attributing their ratings. The company’s strong competitive position in the growing GCC market was also referenced, as well as its low risk profile and supportive shareholder base.

 

In addition to the new sukuk, Tabreed has arranged new bank facilities up to AED 1.5 billion. Together with the proceeds from the new sukuk, these will be used to refinance AED 2.8 billion of current corporate debt. The refinancing of this debt will deliver a number of benefits, including improved balance sheet efficiency and a longer debt maturity. These in turn will further improve Tabreed’s cashflow, providing fresh impetus for the company’s expansion into both existing and new markets.

 

Khaled Abdulla Al Qubaisi, Tabreed’s Chairman, commented: “We are very pleased that Tabreed has been rated as Investment Grade by Moody’s and Fitch. We see this as a testament to the financial strength, robust business model, and strong position we have in the UAE and across the GCC. This new sukuk, which was well received by the market, further strengthens our balance sheet and reinforces our robust financial position and leaves us well placed for further growth.”

 

Jasim Husain Thabet, Tabreed’s Chief Executive Officer, commented: “We are delighted  with the market’s positive response to our sukuk, and with the recognition Tabreed continues to gain as a safe and high-quality investment. This successful issuance leaves us in a stronger position to leverage growth, with even greater capital and operational efficiency.”

 

Tabreed is a partner of choice for organizations across the GCC in providing environmentally friendly district cooling solutions that support the region’s energy sustainability. With 72 district cooling plants located throughout the region, Tabreed currently delivers over 1 million refrigeration tons to key developments in the region including iconic infrastructure projects such as Abu Dhabi’s Al Maryah Island, Yas Island, Sheikh Zayed Grand Mosque, Dubai Metro, Dubai Parks and Resorts, and the Jabal Omar Development in the Holy City of Mecca, Kingdom of Saudi Arabia.

Read also:

Back to all news