Tabreed raises $500m with 7 year sukuk
District cooling firm also arranges new bank financing of $409m (AED1.5bn)
National Central Cooling Company (DFM: Tabreed) has successfully raised $500m (AED1.8 bn) with a seven-year sukuk.
The issue follows a series of fixed income investor meetings which took place in Europe and Asia, as well as in the UAE.
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.
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.
In addition to the new sukuk, Tabreed has arranged new bank facilities up to $409m AED1.5bn.
Together with the proceeds from the new sukuk, these will be used to refinance $762m (AED2.8bn) 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, chairman, Tabreed said: “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.”
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.