Aldar Investment Properties, a fully owned subsidiary of Abu Dhabi’s largest developer Aldar Properties, has hired banks to arrange investor meetings ahead of a planned issue of US dollar-denominated sukuk, or Islamic bonds, a document issued by one of the banks has shown.
Reuters reported that Aldar, 37.3% indirectly owned by Abu Dhabi's sovereign wealth fund Mubadala, has mandated a group of banks including Dubai Islamic Bank, First Abu Dhabi Bank, HSBC, and Standard Chartered to lead the potential deal.
Subject to market conditions, Aldar is planning to sell a sukuk with a ten-year maturity and of benchmark size, which generally means upwards of $500 million, the document said.
A sukuk is a sharia-compliant bond, which pays profit on tangible assets rather than interest. To ensure Islamic law is observed, no sukuk can invest in non-sharia compliant business activities such as gambling or alcohol. Today, sukuks account for about $350 billion of global investments, compared to the international bond market, which accounts for around $100 trillion.