Abu Dhabi royal-owned company revives plans for dollar sukuk

PD, a relatively small real estate player in Abu Dhabi owned by members of its ruling family, last year pulled a $350 million sukuk after its launch and ahead of pricing. Abu Dhabi Commercial Bank, Citi, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, JP Morgan, Kamco Invest, KFH Capital, Mashreq and Warba Bank are arranging the planned benchmark sale of three-year sukuk.

The Private Department of Sheikh Mohamed Bin Khalid al-Nahyan LLC (PD) is reviving plans to sell U.S. dollar-denominated sukuk, bank documents showed on Monday. PD, a relatively small real estate player in Abu Dhabi owned by members of its ruling family, last year pulled a $350 million sukuk after its launch and ahead of pricing.

Abu Dhabi Commercial Bank, Citi, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, JP Morgan, Kamco Invest, KFH Capital, Mashreq and Warba Bank are arranging the planned benchmark sale of three-year sukuk. Emirates NBD Capital, First Abu Dhabi Bank, Abu Dhabi Commercial Bank, Dubai Islamic Bank and Mashreq were on last year's scrapped sukuk sale.

PD is chaired by Sheikh Mohamed Bin Khalid Al Nahyan, the "direct cousin" of UAE President Sheikh Mohammed bin Zayed, an investor presentation reviewed by Reuters showed. The company is fully owned by 11 members of Abu Dhabi's ruling family. PD posted net profit of 118 million dirhams ($32.13 million) in 2021, up slightly from 111 million dirhams in 2020 but down from 137 million dirhams in 2019. It had assets of 5.5 billion dirhams as of end-2021, the presentation showed.

PD has a no-dividend policy until 2027, the presentation said. It has so far relied on equity from its shareholders and bank debt for funding and is trying to diversify its funding sources. It had nearly 3 billion dirhams in total debt at the end of last year, of which 131.6 million dirhams was due to mature over the following 12 months.

PD was aiming to raise $600 million in July last year before setting the size at $350 million and subsequently pulling the deal at the eleventh hour. Sources said at the time that the company likely faced a rating downgrade if the deal had closed at the $350 million size. PD is rated 'BB-' by S&P and the planned sukuk is expected to have a 'B+' rating, the presentation showed.

Shortly after the scrapped sukuk sale, Moody's withdrew its rating for the company and its $1 billion issuance programme "because the company decided not to proceed with its planned sukuk issuance," the rating agency said at the time. ($1 = 3.6729 UAE dirham)

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