Tabreed issues $700m inaugural green sukuk
ABU DHABI, 3 days ago
Tabreed, a leading district cooling company, today (March 5) announced the successful raising of $700 million via an inaugural, five-year green sukuk – the first issuance under its new USD 1.5 billion trust certificate issuance programme.
The new sukuk will be listed and traded on London Stock Exchange’s International Securities Market.
The issuance of new green sukuk attracted strong institutional demand from high quality local, regional and international investors.
This led to the order books exceeding 4.3 times and final issue being oversubscribed by nearly 2.6 times, reflecting the high level of investor confidence in Tabreed’s robust credit fundamentals.
The sukuk was competitively priced with a profit rate of 5.279%, achieving the highest tightening by any investment grade regional sukuk issuance this year and the tightest ever credit spread for a five-year instrument by Tabreed and or any other UAE corporate sukuk with a similar credit rating, said Tabreed in a statement.
This high demand was supported by investment grade credit ratings from Moody’s (Baa3) and Fitch (BBB), consistent with Tabreed’s corporate ratings, it stated.
Following the sukuk announcement, CEO Khalid Al Marzooqi, said: "Tabreed’s enviable reputation is built on the foundations of sustainability and operational excellence, so this, our first green sukuk, is perfectly aligned with our existing business while focussing on new developments."
Tabreed, he stated, continues to be a pioneer in the international sukuk market, having been a regular issuer over the past 20 years.
In 2006, its $200 million sukuk issuance was the first to be listed on the London Stock Exchange, which paved the way for other issuers to follow. That issuance was also the first rated sukuk by a corporate entity in the Middle East.
Al Marzooqi said: "The UAE has an ambitious roadmap for net-zero and we are proud at Tabreed to play a vital role in preventing large scale carbon emissions while enabling societal progress through sustainable district cooling."
"The importance this company attaches to ESG cannot be overstated and our investors know that the energy transition, of which we are at the very centre, is not only good for the environment but good for business, too," he stated.
Chief Financial Officer Adel Al Wahedi said: "We are delighted with the investor response to our first green sukuk. This demonstrates the strength of our business model, financial stability and sustainability credentials of Tabreed."
"This issuance is part of our $1.5 billion programme aimed at supporting our ambitious growth plans and sustainability commitments," he added.
The framework was accompanied by a Second Party Opinion from leading, global ESG ratings agency, Sustainalytics. Together they demonstrate the sustainable nature of Tabreed’s district cooling operations, which use approximately 50% less electricity than conventional cooling.
Citi and Standard Chartered Bank acted as Joint Global Coordinators and Citi, Emirates NBD Capital, First Abu Dhabi Bank, HSBC and Standard Chartered Bank acted as Joint Lead Managers and Joint Bookrunners, with Abu Dhabi Commercial Bank acting as Co-Manager.-TradeArabia News Service
