Aldar Properties has successfully priced its inaugural $1bn hybrid capital issuance, attracting robust demand from a wide range of regional and international investors. Aldar’s issuance at the “PJSC” level represents the largest conventional hybrid in the Middle East. Additionally, the transaction received the tightest credit spread at issue and the best rating for a corporate hybrid in the Central and Eastern Europe, Middle East, and Africa (CEEMEA) region.
Strategic Impact and Use of Proceeds
For the first time, the project adds a hybrid layer to Aldar’s capital structure, strengthening its solid credit profile and balance sheet while boosting resilience and stability in the financial system. Proceeds will support Aldar’s transformational growth plan and strategic priorities, including landbank replenishment and expansion, and development to hold portfolio and acquisitions.
Strong Investor Response
The issuance was oversubscribed 3.8 times, underscoring strong investor confidence in Aldar’s financial strength, strategic direction, and potential for growth and value creation. Total orders from various institutional investors across diverse geographies exceeded $4.9 bn.
Geographic Distribution
The final allocation comprises investors from:
- Middle East and North Africa: 41%
- United Kingdom: 38%
- Europe: 9%
- North America: 8%
- Asia: 4%
Management Commentary
Faisal Falaknaz, Group Chief Financial and Sustainability Officer at Aldar said: “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. “The company has carved a credible and proven track record of delivering measured and sustainable growth, and this landmark hybrid issuance supports the continued execution against our growth ambitions by further optimizing our capital structure, setting firm foundations for Aldar to pursue a strategy to deliver significant value creation for all our stakeholders in the coming years.“
Technical Details
The unsecured, subordinated 30.25-year notes with debt and equity characteristics provide investors with an initial yield of 6.625% and a 7.25-year non-call period. Aldar’s capital structure will have more flexibility thanks to the coupon payments, which will be made semi-annually and can be postponed for up to five years. They are also cumulative and compounding.
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Credit Rating and Financial Impact
Moody’s gave the hybrid notes a standalone credit rating of Baa3 in January 2025 and reiterated Aldar’s Baa2 credit rating with a stable outlook. This rating reflects Aldar’s robust financial position, strong standing in the market, and the innovative structure of the issuance, which for rating purposes is treated as equity and debt in equal measure. For Aldar equity investors, the issue is both non-dilutive and accretive as a debt instrument; the proceeds are utilized to settle senior debt to improve Aldar’s overall credit rating and maintain financing capacity for the company’s future growth plans and pipeline.
