A subsidiary of the Emirati “Aldar” raises $ 500 million by issuing the first green sukuk

Abu Dhabi – Mubasher: Aldar Real Estate Investment Company, a subsidiary of Aldar Properties, raised $500 million by issuing the first green sukuk.

The ten-year green sukuk profit rate has been set at 4.875 percent, which is among the lowest for any company issuance in 2023, according to a press release.

Aldar Real Estate Investment Company’s actual financing cost will be well below the market average as a result of the successful proactive hedging strategy implemented in 2021 and 2022 when long-term interest rates were very low.

The swaps executed by the company will reduce the effective profit rate of the issue to 3.85%.

The issuance of sukuk came after successful promotional meetings with international investors, which resulted in the demand for it exceeding the volume of supply by four times, amid great demand from a wide range of local, regional and international investors, whose total value of orders amounted to more than $2.3 billion.

These sukuk are part of a $2 billion financing program launched by Aldar Real Estate Investment to support its growth plans and implement its sustainable initiatives in line with the goals of the Paris climate agreement, the UAE’s strategic initiative to achieve climate neutrality by 2050, and Aldar’s plan to achieve net zero emissions to become a carbon-neutral company by 2050. .

The issuance proceeds will be used in line with Aldar Properties’ green financing framework, which guides the company’s investments in green projects such as green buildings, modernization of existing assets to enhance their energy efficiency, sustainable water management, implementation of effective pollution control measures, and utilization of renewable energy sources.

Aldar Real Estate Investment Company, which is distinguished by its diversified portfolio of real estate assets that generate recurring income, amounting to more than 23 billion dirhams, benefits from a strong credit rating of investment grade at (Baa1) by Moody’s.

Aldar scored 60 on the Dow Jones Sustainability Index, making it among the top 7% of the 237 global real estate companies invited to participate in the Dow Jones Sustainability Index survey.

Aldar Properties has adopted a green finance framework that is in line with the United Nations Sustainable Development Goals and is based on the principles of the International Capital Markets Association (IFMA).ICMA) and the Loan Market Association.

Aldar launched its Net Zero Emission Plan in January 2023, committing to becoming a carbon-neutral company with “net zero emissions” within greenhouse emissions scopes 1, 2 and 3 by 2050.

The company has set a set of interim goals to reduce emissions for the year 2030 in line with climate science, according to which the company will achieve net zero emissions of greenhouse gases within Scopes 1 and 2 with a decrease of 45% in the intensity of greenhouse gas emissions within Scope 3 according to the baseline of the company’s environmental footprint. in 2021.

A document revealed two days ago that a unit belonging to Aldar Properties had assigned banks to arrange contact with international investors today, Tuesday, to be followed by a series of individual meetings with a small group of investors in fixed income instruments.

The document indicated that this will be followed by the first record issuance of unsecured green sukuk denominated in dollars for a period of 10 years, according to market conditions.

The company appointed HSBC and Standard Chartered as joint global coordinators.

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