Arada Mandates Banks for New USD Sukuk as Developer Eyes GCC Growth

Sharjah, UAE – 25 July 2025 - Arada Developments has mandated a consortium of regional and international banks for the issuance of a new 5-year USD-denominated sukuk, as the Sharjah-based developer seeks to leverage growing investor appetite amid a region-wide construction boom.

The planned Regulation S benchmark issuance, expected to be rated B1 by Moody’s and BB- by Fitch, will be issued under Arada Sukuk 2 Limited’s $1 billion Trust Certificate Issuance Programme. This marks Arada’s first sukuk issuance of 2025, and follows a series of successful entries into the debt capital markets in previous years.

Wide Bank Syndicate, Investor Outreach Underway

A robust line-up of institutions has been appointed for the offering. Acting as joint global coordinators are:

• Abu Dhabi Commercial Bank
• Abu Dhabi Islamic Bank
• Dubai Islamic Bank
• Emirates NBD Capital
• First Abu Dhabi Bank
• Mashreq
• Standard Chartered Bank

Meanwhile, Arab Bank, Arqaam Capital, Bank ABC, RAKBANK, Sharjah Islamic Bank, and Warba Bank will serve as joint lead managers and bookrunners.

A series of fixed-income investor calls began on Thursday, aimed at drumming up interest from global investors for the USD-denominated sukuk.

Tender Offer to Manage Cost and Maturity Profile

In tandem with the new issuance, Arada also launched a capped tender offer for up to $100 million in face value of its existing $500 million sukuk due 2027. This proactive move is intended to optimise the company’s cost of funding, balance sheet structure, and debt maturity profile.

Arada last accessed debt markets in September 2024, issuing a $150 million tap on its $400 million sukuk maturing in June 2029. The developer’s outstanding debt also includes a $500 million sukuk with an 8.125% coupon, maturing in June 2027.

Recent Modifications to Sukuk Terms Approved

On Wednesday, Arada secured investor approval for modifications to the terms and conditions of its $550 million Trust Certificates. According to IFR, the changes were aimed at enhancing the company’s capital structure flexibility and maintaining a robust credit profile aligned with its long-term growth strategy.

The amendments provide Arada “with flexibility to capitalise on future market growth and expansion opportunities and to help it manage its capital structure, while maintaining a robust credit profile in line within its business plan,” IFR reported.

Regional Developers Bullish on Sukuk Market

The move comes as more UAE-based developers return to capital markets. Recent issuers include Omniyat, Damac, and Aldar Investment Properties, each tapping into the sukuk market to fund expansions and capitalise on sustained demand for real estate in the Gulf.

Arada, founded in 2017 and now Sharjah’s largest developer, is jointly owned by Sheikh Sultan bin Ahmed Al Qasimi, Deputy Ruler of Sharjah, and Prince Khalid Bin Alwaleed Bin Talal Alsaud of Saudi Arabia’s royal family. The developer has been aggressively expanding its footprint with new master-planned communities and premium developments across the UAE.