Sobha Realty Successfully Issues Inaugural USD 750 Million Green Sukuk, Issue Oversubscribed 2.8x

Sobha Realty, leading global luxury real estate developer, announced the successful issuance of its inaugural USD 750 million Green Sukuk. This landmark transaction, the largest in the Company's history and the largest Green Sukuk by a real estate developer globally till date, was executed under its USD 1.5 billion Trust Certificate Issuance Programme. The Sukuk will be listed on the London Stock Exchange and Nasdaq Dubai.

The order book for this 5-year Green Sukuk, maturing in 2030, was significantly oversubscribed, reaching approximately USD 2.1 billion, 2.8 times the issuance size, reflecting strong investor confidence in Sobha Realty's credit profile and sustainability strategy. Robust demand from a high-quality investor base, with 56% allocated to regional investors and 44% to international investors, enabled a substantial price tightening of 50 basis points from Initial Price Thoughts (IPTs). The Sukuk was priced at a profit rate of 7.125% per annum, with an effective yield of 7.375% per annum.

The net proceeds from this Green Sukuk will be allocated to financing or refinancing eligible green projects as defined in Sobha Realty’s Green Financing Framework. This framework, aligned with the International Capital Market Association (ICMA) Green Bond Principles and the Loan Market Association (LMA) Green Loan Principles, received an independent Second Party Opinion (SPO) from DNV, confirming its alignment with market best practices.

Mr. Ravi Menon, Chairman of Sobha Group, commented: “The resounding success of our inaugural Green Sukuk issuance is a powerful testament to the market's recognition of Sobha Realty's robust financial standing and our deep, unwavering commitment to sustainable development. This transaction is not just a financing initiative; it is a strategic alignment of our capital structure with our core values. It enables us to accelerate our ambitious ESG agenda, funding projects that will deliver tangible environmental benefits and solidify our position as a leader in crafting sustainable luxury communities. This milestone reinforces our dedication to creating long-term value for all our stakeholders while contributing positively to the UAE’s Net Zero by 2050 Strategic Initiative.”

The Sukuk issuance is expected to be rated Ba2 (Stable) by Moody’s and BB (Stable) by S&P, in line with the corporate credit rating of the obligor, PNC Investments LLC.

Sobha Realty appointed Dubai Islamic Bank PJSC, Emirates NBD Capital, J.P. Morgan Securities plc, Mashreqbank psc, and Standard Chartered Bank as Joint Global Coordinators and Abu Dhabi Commercial Bank PJSC, Abu Dhabi Islamic Bank PJSC, Ajman Bank PJSC, Arab Banking Corporation (B.S.C.), Arqaam Capital, Deutsche Bank, First Abu Dhabi Bank PJSC, The National Bank of Ras Al-Khaimah (P.S.C.), Sharjah Islamic Bank PJSC, and Warba Bank K.S.C.P. as Joint Lead Managers and Joint Bookrunners. Deutsche Bank and Emirates NBD Capital were appointed as Joint ESG Structuring Coordinators.

Clifford Chance and Dentons served as legal counsels, while Grant Thornton was appointed as the auditor for this issuance.