Clifford Chance has provided legal counsel to the Joint Lead Managers with a team comprised of partner and head of Middle East capital markets, Stuart Ure (Dubai), Julian Walley (senior associate, Dubai), Shauaib Mirza (consultant, Dubai) and Nader Koudsi (associate, Dubai).
Aldar properties legal team is led by group general counsel Emma O’Brien (pictured).
International law firm Clifford Chance has provided legal counsel to the Joint Lead Managers in the issuance of a landmark USD500 million green sukuk by Aldar Investment Properties (AIP), a subsidiary of Aldar Properties and the largest real estate management company in Abu Dhabi.
HSBC and Standard Chartered Bank were joint global coordinators on the issuance, along with Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank and Mashreqbank (acting through its Islamic Banking Division), as joint lead managers and joint bookrunners.
The 10-year sukuk was priced with a competitive 4.875% profit rate and achieved one of the highest price tightening among corporate issuances in 2023. A successful pre-hedging strategy implemented in 2021 and 2022, during a period of lower long-term rates, significantly reduced the effective funding cost for AIP. Forward starting swaps secured as part of this strategy will further decrease the issuance’s effective rate to 3.85%. The offering received strong investor interest, with total orders exceeding $2.3 billion, four times the sukuk’s value, from a diverse range of local, regional, and international investors.
This issuance is part of AIP’s $2 billion financing program, aimed at supporting its growth agenda and sustainability commitments in alignment with the Paris Agreement, the UAE Net Zero by 2050 Strategic Initiative, and Aldar’s ambition to become a net-zero carbon business by 2050. The proceeds from the sukuk will be utilized according to Aldar’s Green Finance Framework, which governs investment in sustainable projects such as green buildings, energy-efficient property upgrades, sustainable water management, pollution control measures, and renewable energy sources.
Aldar has adopted a green financing framework that aligns with the United Nations Sustainable Development Goals and follows principles outlined by the International Capital Markets Association (ICMA) and the Loan Market Association. The framework sets clear criteria for the use of proceeds and is overseen by Aldar’s Sustainability Council, chaired by the Group Director of Sustainability and Corporate Social Responsibility. To ensure adherence to best practices, Aldar has obtained a ‘Second Party Opinion’ from Sustainalytics, providing external verification of the framework’s sustainability quality and its alignment with Green Finance Principles.