Aldar Properties has successfully completed its first $1 billion hybrid capital issuance, marking a significant milestone as the largest conventional hybrid issuance in the Middle East. The issuance attracted robust interest from a diverse group of regional and international investors, underscoring confidence in Aldar’s financial health and growth strategy.
The issuance, made at the PJSC level, achieved the tightest credit spread and highest rating for a corporate hybrid in the Central & Eastern Europe, Middle East, and Africa (CEEMEA) region. Proceeds will be allocated to support Aldar’s ambitious growth plans, including landbank expansion, portfolio development, and acquisitions, according to a company statement.
Demand for the issuance exceeded expectations, with total orders surpassing $4.9 billion, representing an oversubscription of 3.8 times. The investor base spanned the Middle East and North Africa (41%), the United Kingdom (38%), Europe (9%), North America (8%), and Asia (4%).
Faisal Falaknaz, Aldar’s Group Chief Financial and Sustainability Officer, highlighted the significance of the issuance. “The strong appetite for this issuance from a broad base of international institutional investors is a statement of confidence in Aldar’s vision and strategic direction,” he said. “This landmark hybrid issuance supports the continued execution of our growth ambitions by further optimizing our capital structure and setting a strong foundation for delivering significant value to our stakeholders in the years ahead.”
The hybrid capital notes, which blend characteristics of debt and equity, are unsecured and subordinated with a maturity of 30.25 years. They offer an initial yield of 6.625% and a non-call period of 7.25 years. Coupon payments, distributed semi-annually, can be deferred for up to five years, providing Aldar with flexibility in managing its capital structure.
In January 2025, Moody’s reaffirmed Aldar’s Baa2 credit rating with a stable outlook and assigned a standalone credit rating of Baa3 to the hybrid notes. The innovative structure of the issuance allows it to be treated as both equity and debt for rating purposes while remaining non-dilutive for equity investors. Aldar plans to use the proceeds to pay down senior debt, enhancing its credit profile and maintaining capacity for future growth initiatives.
The issuance was marketed under Regulation S and coordinated globally by Citi. Other joint lead bookrunners included Abu Dhabi Commercial Bank, Bank of China, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, Intesa Sanpaolo, J.P. Morgan, Mashreq, National Bank of Ras Al Khaimah, and Standard Chartered.
This successful issuance highlights Aldar’s ability to navigate global financial markets while bolstering its position as a key player in the regional real estate sector.
