Tuesday 28, November 2017 by Jessica Combes

Emirates REIT’s shareholders approve Sukuk issuance

 

During its Extraordinary General Meeting that held on 23 November, Emirates REIT shareholders approved the proposal to issue Sukuk trust certificates (Certificates).

The issuance is expected to take place between Q4 2017 and Q1 2018. Standard Chartered Bank has been appointed as global coordinator, alongside Dubai Islamic Bank, Emirates NBD Capital and Warba Bank as joint lead managers. A fixed income investor roadshow in the UAE, Asia and Europe will commence on 28 November 2017.

The Certificates will be issued under a standalone Regulation S offering and will be listed on the Irish Stock Exchange. The five-year tenor Sukuk will extend the REIT’s debt maturity profile and replace amortising loans with bullet funding, resulting in an increase of free cash flows by approximately $30 million per year. The Sukuk will also allow the REIT to establish an international profile in the fixed income market and access a more diversified investor base.

“Having access to the debt capital market is strategic for the growth of REITs. This Sukuk is an important milestone for us. Emirates REIT will have immediate financial benefits by significantly increasing free cash flow, and removing any rate increase risk which is advantageous in the current market environment. Going forward, maintaining a credit rating will increase the visibility of the REIT and investor confidence. It will also allow the REIT to take advantage of capital markets, to grow its portfolio and enhance its performance,” said Sylvain Vieujot, CEO of Equitativa Dubai, the REIT Manager.

Fitch Ratings has assigned a Long-Term Issuer Default Rating of 'BB+ (EXP)' with a Stable outlook to Emirates REIT and a senior unsecured debt rating of ‘BB+ (EXP)’ to the upcoming Sukuk issuance.

 

 

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