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Abu Dhabi royal-owned firm revives plans for dollar sukuk

By Reuters
Creative Commons
Abu Dhabi's PD was aiming to raise $600 million in July last year before setting the size at $350 million and subsequently pulling the deal at the eleventh hour

The Private Department of Sheikh Mohamed Bin Khalid Al-Nahyan LLC (PD) is reviving plans to sell US dollar-denominated sukuk, bank documents showed on Monday.

PD, a relatively small real estate player in Abu Dhabi owned by members of its ruling family, last year pulled a $350 million sukuk after its launch and ahead of pricing.

Abu Dhabi Commercial Bank, Citi, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, JP Morgan, Kamco Invest, KFH Capital, Mashreq and Warba Bank are arranging the planned benchmark sale of three-year sukuk.

Emirates NBD Capital, First Abu Dhabi Bank, Abu Dhabi Commercial Bank, Dubai Islamic Bank and Mashreq were on last year’s scrapped sukuk sale.

PD is chaired by Sheikh Mohamed Bin Khalid Al Nahyan, the “direct cousin” of UAE President Sheikh Mohammed bin Zayed, an investor presentation reviewed by Reuters showed. The company is fully owned by 11 members of Abu Dhabi’s ruling family.

PD posted net profit of AED 118 million ($32.13 million) in 2021, up slightly from AED 111 million in 2020 but down from AED 137 million in 2019. It had assets of AED 5.5 billion as of end-2021, the presentation showed.

The firm has a no-dividend policy until 2027, the presentation said. It has so far relied on equity from its shareholders and bank debt for funding and is trying to diversify its funding sources.

It had nearly AED 3 billion in total debt at the end of last year, of which AED 131.6 million was due to mature over the following 12 months.

PD was aiming to raise $600 million in July last year before setting the size at $350 million and subsequently pulling the deal at the eleventh hour. Sources said at the time that the company likely faced a rating downgrade if the deal had closed at the $350 million size.

PD is rated ‘BB-‘ by S&P and the planned sukuk is expected to have a ‘B+’ rating, the presentation showed.

Shortly after the scrapped sukuk sale, Moody’s withdrew its rating for the company and its $1 billion issuance programme “because the company decided not to proceed with its planned sukuk issuance,” the rating agency said at the time.