Arabian Centres completes issuance of dollar-denominated sukuk worth $225 mln

Arabian Centres building

Arabian Centres Co. completed today, July 15, the issuance of dollar-denominated Shariah-compliant sukuk (Sukuk ll Re-Tap), at a value of $225 million, in preparation for allocating the sukuk issued on July 28, 2021.

This issuance will be merged and will form part of the existing sukuk issuance that was issued on April 7, 2021, the company said in a bourse filing.

Upon the completion of this issuance, the total outstanding sukuk issued by the company so far amounts to $1.375 billion.

The total number of sukuk is 1,125 at a par value of $200,000, and the return of sukuk is 5.625% for the previous issuance on April 7, 2021 (the issuance was reissued at a price of 104.75%, which makes the actual return of the sukuk for this issuance 4.585%), while its maturity period is 5.5 years (maturity on Oct 7, 2026).

The sukuk is subject to early dissolution at the option of the company upon the occurrence of a tax event or a total loss event, an asset disposition event, a delisting event, or a dissolution event. A change of control put option, delisting event put option, and an asset disposition put option and a company clean-up call option also apply to the sukuk redemption.

A request was submitted to the International Stock Exchange Authority Ltd. for the listing of and permission to deal in the certificates of the sukuk on the Official List of The International Stock Exchange. Sukuk certificates might be sold in reliance on Regulation S or Rule 144A under the US Securities Act of 1933, as amended.

The company will continue to complete all the necessary procedures to allocate these sukuks to investors, as this subscription was triple oversubscribed.

This motivated the company to increase the issuance value to $225 million out of $150 million, noting that it had benefited excellently during this issuance through obtaining savings in the borrowing rate by nearly 1% compared to the previous issuance.

This step comes to support and strengthen the company's financial position through settling a large portion of its existing loans, and to free-up many of its assets as part of the strategy to release all its mortgaged assets at lending banks.

This step will also provide an additional liquidity to support and finance the company's near and medium-term expansion plan that includes eight projects, which comes in line with the broad strategy, aiming to expand within the lifestyle shopping centers, that include various entertainment destinations such as cinemas, luxurious restaurants and cafes, in addition to retail stores.