Date: July 2023
Issuer: Sobha Sukuk Limited
Obligor: PNC Investments (parent of Sobha Realty)
Size: $300 million
Tenor: Five years (callable July 2026)
Banks: Dubai Islamic Bank, Emirates NBD, Mashreq, Standard Chartered, Sharjah Islamic Bank (joint lead managers and bookrunners)
Amid many debt capital market deals last year from UAE real-estate developers, there is one debut sukuk that stood out: the $300 million five-year from Sobha Sukuk Limited.
The transaction, which represents the first time Dubai-based real-estate developer Sobha Realty has raised financing on the international capital markets in any format, was distinctive for several additional reasons, making it Euromoney’s best Islamic real estate deal.
Reasons include an international orderbook that was more than twice oversubscribed, but the most unusual aspect of the sukuk was it being structured with a call option. This is believed to be the first time that has been included in a DCM financing of any sub-investment grade rated corporate in the Middle East region.
Sobha is rated Ba3/BB- by Moody’s Investor Service and S&P Global.
All the key objectives of the deal were achieved
The option, which enables Sobha to buy back the sukuk in July 2026, essentially gives issuers more funding flexibility, particularly the opportunity to refinance twice.