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Sharjah developer Arada tightens price on $450mln sukuk offering
Sharjah developer Arada tightens price on $450mln sukuk offering

Zawya

time2 days ago

  • Business
  • Zawya

Sharjah developer Arada tightens price on $450mln sukuk offering

Arada Developments, rated B1 by Moody's and B+ by Fitch, has launched its $450 million sukuk with a coupon of 7.150%, tightening from the initial price guidance of 7.625%-7.750% for a spread of 317.3 basis points over US Treasuries. Proceeds of the five-year fixed rate Reg S Sukuk issuance will be used for a tender offer of up to $100 million on Arada's existing sukuk maturing 2027, with the balance deployed for general corporate purposes. Demand came from both regional and international investors with a subscription order book peaking above $2 billion (excluding Joint Lead Managers), equivalent to over four times the offer size. The sukuk has been listed on the London Stock Exchange and the Nasdaq Dubai and will fall under Arada Sukuk 2 Limited's $1 billion Trust Certificate Issuance Programme. Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, Mashreq and Standard Chartered Bank have been tapped as joint global coordinators, while Arab Bank, Arqaam Capital, Bank ABC, RAKBANK, Sharjah Islamic Bank and Warba Bank, were appointed joint lead managers and bookrunners on the issuance. Arada last raised debt in September 2024, issuing a $150 million tap on its $400 million sukuk maturing in June 2029. The company has one other outstanding bond, a $500 million 8.125% sukuk due in June 2027. Arada, which is Sharjah's largest property developer, is jointly owned by Sheikh Sultan bin Ahmed Al Qasimi, the Deputy Ruler of the Sharjah and Prince Khalid Bin Alwaleed Bin Talal Alsaud, a member of the royal family of the Saudi Arabia. The issuance by Arada is the latest in a growing number of property developers tapping debt markets to capitalise on a construction boom in the GCC. In recent months, several developers including Omniyat, Damac, and the Abu-Dhabi based Aldar Investment Properties have tapped debt markets with sukuk issuances. (Writing by Bindu Rai, editing by Brinda Darasha)

Arada completes successful closure of 4 times-oversubscribed $450mln sukuk
Arada completes successful closure of 4 times-oversubscribed $450mln sukuk

Zawya

time3 days ago

  • Business
  • Zawya

Arada completes successful closure of 4 times-oversubscribed $450mln sukuk

SHARJAH - Arada Developments LLC, rated B1 by Moody's and B+ by Fitch, has successfully completed the issuance of a US$450 million Sukuk, which has been listed on the London Stock Exchange and the Nasdaq Dubai. The five-year fixed rate RegS Sukuk issuance, rated BB- by Fitch and B1 by Moody's, was priced with a coupon of 7.150%, tightening 47.5bps- 60bps from the initial price guidance of 7.625%-7.750% for a spread of 317 bps over US Treasuries, for the tightest reoffer yield ever achieved by Arada. The proceeds of the issuance will be used for a tender offer of up to US$100 million on Arada's existing Sukuk maturing 2027, with the balance for general corporate purposes. The Sukuk issuance saw strong demand from both regional and international investors with a subscription order book peaking above US$2 billion (excluding Joint Lead Managers), equivalent to over four times the offer size. HRH Prince Khaled bin Alwaleed bin Talal, Executive Vice Chairman of Arada, said, 'Our latest successful return to the global markets reflects once again the trust being placed by regional and international investors in Arada's track record, robust financial position and growth prospects. This issuance serves as a platform of our next phase of growth as we continue target growth opportunities both at home in the UAE and abroad.' Investor interest for the Sukuk was diversified geographically, coming from Europe, the Middle East and Asia. The investors for this issuance include banks, private banks, asset and fund managers, and hedge funds. The Joint Global Coordinators for the Sukuk were Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, Mashreq and Standard Chartered Bank, while Arab Bank, Arqaam Capital, Bank ABC, RAK Bank, Sharjah Islamic Bank and Warba Bank acted as Joint Lead Managers and Bookrunners. Since its launch in 2017, Arada has launched nine successful projects in both Sharjah and Dubai, and has a pipeline of existing and future projects in the UAE and Australia valued at over AED90 billion. In total, Arada has sold over 17,000 units since inception, valued at over AED29 billion, with over 10,000 units completed.

For Bond Dealers, It's All About Bills at Bessent's Treasury
For Bond Dealers, It's All About Bills at Bessent's Treasury

Yahoo

time3 days ago

  • Business
  • Yahoo

For Bond Dealers, It's All About Bills at Bessent's Treasury

(Bloomberg) -- Since Scott Bessent took the Treasury's helm in January, bond dealers have done a 180 on the key question about his issuance strategy in the $29 trillion market for US Treasuries. Budapest's Most Historic Site Gets a Controversial Rebuild Can This Bridge Ease the Troubled US-Canadian Relationship? Trump Administration Sues NYC Over Sanctuary City Policy At the start, the focus was how quickly he might ramp up sales of longer-term securities. That's after Bessent and other Republicans accused former Treasury Secretary Janet Yellen for artificially holding down sales of that kind of debt, and said it was an attempt to keep borrowing costs low before the election. Bessent quickly adopted the Yellen debt-management plan, however, and has repeatedly made clear he isn't about to boost issuance of notes and bonds because their yields are too high. Now the debate is about the limits of Treasury's bias to sell bills, which mature in up to a year. Dealers will be looking for clues in the Treasury Department's next formal update of debt-sales plans, due Wednesday. 'The commentary we've heard recently suggested that there isn't necessarily an urgency right now to start increasing long-end issuance, and that they can meet near-term needs with increased bill issuance,' Phoebe White, head of US inflation strategy at JPMorgan Chase & Co., said in a phone interview. For now, there's 'a backdrop where we have seen a lot of demand for bills,' including from the growth of money market funds, she said. But there are downsides to the Treasury relying more on bills, including higher volatility in interest payments as it rolls over maturing ones. President Donald Trump and his team say borrowing needs will shrink as growth picks up thanks to tax cuts enacted this month, as well as moves to scrap regulations and revive manufacturing. Plus there's rising revenue from tariffs. All of that in theory argues against boosting sales of long-term securities and locking in relatively high interest costs. In the immediate future, borrowing is on the rise. In its latest quarterly estimate, the Treasury said Monday it now expects to borrow $1.01 trillion in the three months through September — that's up sharply from an April projection of $554 billion, mainly due to distortions from the debt limit. Since Congress raised the ceiling earlier this month, debt managers have been ramping up bill sales to rebuild a cash balance run down during the first half of the year. The Treasury also said Monday it expected net borrowing of $590 billion in the final three months of 2025. For next week's so-called quarterly refunding auctions, which include 3-, 10- and 30-year maturities, Wall Street expects no change from the past several quarters. That would leave the sales totaling $125 billion, made up of the following: $58 billion of 3-year notes on Aug. 5 $42 billion of 10-year notes on Aug. 6 $25 billion of 30-year bonds on Aug. 7 Forecasters predict outsize fiscal deficits for years to come, which would steadily increase the Treasury's need to issue debt. To prevent an over-reliance on bills, that means increasing sales of notes and bonds at some point. Dealers will be closely watching in Wednesday's statement for any tweak to the guidance that officials have had since January last year, that they plan to keep the size of those sales unchanged 'for at least the next several quarters.' If officials see the potential need to boost note and bond auctions starting in February 2026, they might remove the 'at least' wording from their guidance, White and her JPMorgan colleagues wrote in a recent note. But some dealers are betting on a later date. Bank of America Corp. this month scrapped its prediction that February 2026 would see the start of bigger note and bond auctions, now expecting the Treasury to hold off until 2027. Citigroup Inc.'s forecast is May 2026, with risk of a delay until later next year. The refunding announcement also may feature guidance on how much Bessent is prepared to allow bills outstanding to grow as a share of total US debt. If the Treasury continued to refrain from increasing note and bond issuance, the bill share would climb to 27% by 2028 — exceeding its peak in 2020, when sales were ramped up to pay for Covid relief — and to 41% by 2033, according to Citigroup Inc. strategists Alejandra Vazquez Plata and Jason Williams. They don't expect things to go that far, predicting the Treasury will likely have a 'soft cap' of around 25%. The Treasury Borrowing Advisory Committee, a panel of dealers, investors and other market participants, recommends the ratio should average around 20% over time, with 15% as a 'lower bound.' One thing to keep an eye on Wednesday is any 'charge' from the Treasury to the TBAC asking the panel to offer thoughts on broader trends in demand for Treasuries. JPMorgan's White said she's on the lookout for 'anything that would indicate that they're willing to let the weighted average maturity of the debt move shorter.' Buyback Program Bessent has repeatedly pointed to stablecoins as a new source of demand for bills, as new legislation mandates them to hold T-bills or other safe assets in reserve. The Federal Reserve, which has debated whether to skew its purchases toward bills, may be another one. Dealers will also be on watch for any news on the Treasury's program of buying back outstanding securities. The department in April said it was looking at 'enhancements' to that initiative, launched last year. Bessent drew attention to the program after a surge in Treasury market volatility triggered by concerns over Trump's tariff hikes. Barclays Plc strategists predict the Treasury will announce an increase in buybacks on Wednesday. Currently, buybacks are conducted to improve liquidity and aid the Treasury in its cash management. But Bloomberg Intelligence strategists Ira Jersey and Will Hoffman see the potential for a broader objective. The duo point out that Bessent has targeted 10-year yields — a benchmark for borrowing rates such as mortgages — and could deploy buybacks as a way to pressure them lower by cutting the average maturity of US debt. 'If the Trump administration believes long-term rates will fall with reduced supply of longer-term debt, this would be one way of testing that hypothesis,' they wrote. --With assistance from Alex Newman and Alexandra Harris. (Updates with quarterly borrrowing estimate in fourth paragraph after first chart.) Burning Man Is Burning Through Cash It's Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan Elon Musk's Empire Is Creaking Under the Strain of Elon Musk Confessions of an American Who Helped North Korea's Wild Remote Worker Scheme Cage-Free Eggs Are Booming in the US, Despite Cost and Trump's Efforts ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

For Bond Dealers, It's Now All About Bills at Bessent's Treasury
For Bond Dealers, It's Now All About Bills at Bessent's Treasury

Yahoo

time4 days ago

  • Business
  • Yahoo

For Bond Dealers, It's Now All About Bills at Bessent's Treasury

(Bloomberg) -- Since Scott Bessent took the Treasury's helm in January, bond dealers have done a 180 on the key question about his issuance strategy in the $29 trillion market for US Treasuries. The High Costs of Trump's 'Big Beautiful' New Car Loan Deduction Can This Bridge Ease the Troubled US-Canadian Relationship? Budapest's Most Historic Site Gets a Controversial Rebuild Trump Administration Sues NYC Over Sanctuary City Policy At the start, the focus was how quickly he might ramp up sales of longer-term securities. That's after Bessent and other Republicans accused former Treasury Secretary Janet Yellen for artificially holding down sales of that kind of debt, and said it was an attempt to keep borrowing costs low before the election. Bessent quickly adopted the Yellen debt-management plan, however, and has repeatedly made clear he isn't about to boost issuance of notes and bonds because their yields are too high. Now the debate is about the limits of Treasury's bias to sell bills, which mature in up to a year. Dealers will be looking for clues in the Treasury Department's next formal update of debt-sales plans, due Wednesday. 'The commentary we've heard recently suggested that there isn't necessarily an urgency right now to start increasing long-end issuance, and that they can meet near-term needs with increased bill issuance,' Phoebe White, head of US inflation strategy at JPMorgan Chase & Co., said in a phone interview. For now, there's 'a backdrop where we have seen a lot of demand for bills,' including from the growth of money market funds, she said. But there are downsides to the Treasury relying more on bills, including higher volatility in interest payments as it rolls over maturing ones. President Donald Trump and his team say borrowing needs will shrink as growth picks up thanks to tax cuts enacted this month, as well as moves to scrap regulations and revive manufacturing. Plus there's rising revenue from tariffs. All of that in theory argues against boosting sales of long-term securities and locking in relatively high interest costs. The Treasury's latest gauge of how much it expects to borrow is due Monday afternoon. It's expected to almost double its previous estimate — mainly to account for a surge of bill sales needed to replenish the department's cash stockpile after Congress raised the debt limit earlier this month. Debt managers had to run down their cash balance while operating under the ceiling. Dealers expect a figure of $1 trillion or more for the July-September quarter. For next week's so-called quarterly refunding auctions, which include 3-, 10- and 30-year maturities, Wall Street expects no change from the past several quarters. That would leave the sales totaling $125 billion, made up of the following: $58 billion of 3-year notes on Aug. 5 $42 billion of 10-year notes on Aug. 6 $25 billion of 30-year bonds on Aug. 7 Forecasters predict outsize fiscal deficits for years to come, which would steadily increase the Treasury's need to issue debt. To prevent an over-reliance on bills, that means increasing sales of notes and bonds at some point. Dealers will be closely watching in Wednesday's statement for any tweak to the guidance that officials have had since January last year, that they plan to keep the size of those sales unchanged 'for at least the next several quarters.' If officials see the potential need to boost note and bond auctions starting in February 2026, they might remove the 'at least' wording from their guidance, White and her JPMorgan colleagues wrote in a recent note. But some dealers are betting on a later date. Bank of America Corp. this month scrapped its prediction that February 2026 would see the start of bigger note and bond auctions, now expecting the Treasury to hold off until 2027. Citigroup Inc.'s forecast is May 2026, with risk of a delay until later next year. The refunding announcement also may feature guidance on how much Bessent is prepared to allow bills outstanding to grow as a share of total US debt. If the Treasury continued to refrain from increasing note and bond issuance, the bill share would climb to 27% by 2028 — exceeding its peak in 2020, when sales were ramped up to pay for Covid relief — and to 41% by 2033, according to Citigroup Inc. strategists Alejandra Vazquez Plata and Jason Williams. They don't expect things to go that far, predicting the Treasury will likely have a 'soft cap' of around 25%. The Treasury Borrowing Advisory Committee, a panel of dealers, investors and other market participants, recommends the ratio should average around 20% over time, with 15% as a 'lower bound.' One thing to keep an eye on Wednesday is any 'charge' from the Treasury to the TBAC asking the panel to offer thoughts on broader trends in demand for Treasuries. JPMorgan's White said she's on the lookout for 'anything that would indicate that they're willing to let the weighted average maturity of the debt move shorter.' Buyback Program Bessent has repeatedly pointed to stablecoins as a new source of demand for bills, as new legislation mandates them to hold T-bills or other safe assets in reserve. The Federal Reserve, which has debated whether to skew its purchases toward bills, may be another one. Dealers will also be on watch for any news on the Treasury's program of buying back outstanding securities. The department in April said it was looking at 'enhancements' to that initiative, launched last year. Bessent drew attention to the program after a surge in Treasury market volatility triggered by concerns over Trump's tariff hikes. Barclays Plc strategists predict the Treasury will announce an increase in buybacks on Wednesday. Currently, buybacks are conducted to improve liquidity and aid the Treasury in its cash management. But Bloomberg Intelligence strategists Ira Jersey and Will Hoffman see the potential for a broader objective. The duo point out that Bessent has targeted 10-year yields — a benchmark for borrowing rates such as mortgages — and could deploy buybacks as a way to pressure them lower by cutting the average maturity of US debt. 'If the Trump administration believes long-term rates will fall with reduced supply of longer-term debt, this would be one way of testing that hypothesis,' they wrote. --With assistance from Alex Newman and Alexandra Harris. Burning Man Is Burning Through Cash It's Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan Elon Musk's Empire Is Creaking Under the Strain of Elon Musk Confessions of a Laptop Farmer: How an American Helped North Korea's Wild Remote Worker Scheme Dude! They Killed Colbert! ©2025 Bloomberg L.P. Sign in to access your portfolio

Indonesia's Kangaroo Bond Sale a Tricky Call for Local Investors
Indonesia's Kangaroo Bond Sale a Tricky Call for Local Investors

Bloomberg

time21-07-2025

  • Business
  • Bloomberg

Indonesia's Kangaroo Bond Sale a Tricky Call for Local Investors

Indonesia's plan to issue its first Australian dollar-denominated debt next month has piqued investor interest, though questions mount on how it'll fit into local managers' portfolios. Australia's sovereign Kangaroo market isn't large and Indonesia's issuance is not aligned with the more well known supranational debt from developed markets, according to Betashares Capital Ltd. Funds may also be unable to hold the bonds due to Indonesia's low investment grade credit rating, according to Jamieson Coote Bonds Pty.

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