Clifford Chance: Majid Al Futtaim issues $500 million green sukuk

Clifford Chance, an international law firm, provided legal advice to Majid Al Futtaim (MAF), a prominent conglomerate in the Middle East, Africa, and Asia, on the issuance of a US$500 million green sukuk. Majid Al Futtaim, founded in Dubai in 1992, has evolved into a diverse lifestyle conglomerate operating in 16 countries, employing 46,000 individuals from 114 nationalities, and serving 600 million customers annually through its shopping malls, communities, retail, and entertainment destinations. 

In 2019, Majid Al Futtaim issued the first green sukuk by a GCC corporate, setting the stage for subsequent successful green sukuk offerings. This latest issuance, the fourth in four years, signifies a significant milestone in Majid Al Futtaim’s sustainability journey and underscores its commitment to environmental stewardship and social responsibility. The 10-year sukuk, priced with a 5.000% profit rate, garnered substantial interest from both local and international investors, reflecting the growing demand for sustainable investment opportunities and Majid Al Futtaim’s strong market reputation. 

The proceeds from the sukuk will be allocated to finance and refinance a portfolio of eligible green projects, including renewable energy initiatives, energy-efficient buildings, sustainable water management systems, and other environmentally friendly ventures. This issuance aligns with Majid Al Futtaim’s growth agenda, sustainability commitments, and the objectives outlined in the Paris Agreement, UAE Government’s Net Zero by 2050 Strategic Initiative, and the company’s own targets to become net positive in water consumption and carbon emissions by 2040, as well as eliminate single-use plastic across its operations by 2025. 

Citigroup, HSBC, and Standard Chartered Bank served as joint global coordinators and joint lead managers for the issuance, alongside Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Dubai Islamic Bank, and First Abu Dhabi Bank, who acted as joint lead managers and joint bookrunners. Bank ABC and ICBC also played roles in the transaction. 

International law firm Clifford Chance has advised Majid Al Futtaim on the issuance of a US$500 million green sukuk. Clifford Chance’s team comprised partner and Head of Middle East Capital Markets, Stuart Ure (Dubai), Pearl Mahaga (senior associate, Dubai, pictured), Benedetta Tola (associate, Dubai) and Saby Mahmud (trainee, Dubai). 

Dentons provided legal counsel to the managers. For further information about the team members click here