UAE property developer DAMAC sells $400 mln Islamic bond

UAE property developer DAMAC sells $400 mln Islamic bond

Dubai-based real estate developer DAMAC on Tuesday sold a three-year $400 million Islamic bond, or sukuk, less than initially expected, with a yield of 7.75 percent, a bank document showed.

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The issue followed a series of investor calls and meetings that kicked off last week for a benchmark-sized sale, understood to be at least $500 million.

The company, rated BB- by S&P, priced tighter than guidance of around 7.875 percent released earlier as order books hit over $1.15 billion, a document from a mandated bank showed.

DAMAC’s projects are targeted at the higher-end of the market as the company seeks to take advantage of a property boom in Dubai amid a strong economic recovery after the COVID-19 pandemic.

The company delisted from the Dubai stock market last year after submitting a request to do so in 2021 as the impact of the pandemic weighed on profitability of real estate firms.

Gulf issuers have rushed back to debt capital markets during a typically slow period during the Muslim fasting month of Ramadan, seeking an opportunity to capitalize on lower yields and favorable market dynamics.

Investor demand for sukuk and sustainability-linked, or green, bonds has