Aldar Properties Issues USD 1 Billion Hybrid Notes To Enhance Capital Structure Amid Growth Plans

Aldar Properties PJSC has successfully launched its first USD 1 billion hybrid capital issuance, drawing significant interest from both regional and international investors. This issuance marks the largest conventional hybrid in the Middle East at the 'PJSC' level. It also achieved the highest rating and tightest credit spread for a corporate hybrid in the Central & Eastern Europe, Middle East, and Africa (CEEMEA) region.

The issuance introduces a hybrid layer to Aldar's capital structure for the first time, enhancing financial stability and resilience. The company stated that proceeds will support its growth plan, strategic priorities, landbank replenishment, portfolio expansion, and acquisitions. The issuance was oversubscribed by 3.8 times, with total orders exceeding $4.9 billion from institutional investors across various regions.

The final allocation of investors includes 41% from the Middle East and North Africa, 38% from the United Kingdom, 9% from Europe, 8% from North America, and 4% from Asia. This distribution underscores strong investor confidence in Aldar's financial strength and strategic direction.

The unsecured subordinated notes have a maturity of 30.25 years and offer an initial yield of 6.625%. They include a non-call period of 7.25 years. Coupon payments are semi-annual and may be deferred for up to five years, providing flexibility to Aldar’s capital structure.

In January 2025, Moody’s reaffirmed Aldar’s Baa2 credit rating with a stable outlook while assigning a standalone Baa3 rating to the hybrid notes. This reflects Aldar's solid financial position and innovative issuance structure treated as equity and debt equally for ratings purposes.

As a debt instrument, this issuance is non-dilutive yet accretive for equity investors. Proceeds will be used to pay down senior debt, enhancing Aldar’s credit profile while preserving debt capacity for future growth initiatives.

Global Coordination

Marketed under Regulation S, Citi globally led the issuance coordination. 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 Bank, National Bank of Ras Al Khaimah, and Standard Chartered.

This strategic move by Aldar reinforces its robust balance sheet while supporting its transformational growth plan. The successful pricing of this hybrid capital issuance highlights strong market confidence in Aldar's potential for value creation and growth in diverse geographies.

With inputs from WAM