Aldar Properties has successfully priced its first $1 billion hybrid capital issuance, marking the largest conventional hybrid issuance in the Middle East. The issuance, made at the PJSC level, achieved the highest credit rating and the narrowest credit spread for a corporate hybrid in the Central & Eastern Europe, Middle East, and Africa (CEEMEA) region.
Aldar stated that the hybrid instrument introduces a new capital structure layer, enhancing the company’s financial resilience and supporting its growth strategy. Proceeds will be directed toward landbank expansion, portfolio development, and acquisitions.
The issuance attracted orders of $4.9 billion, oversubscribed by 3.8 times. Institutional investors from the Middle East and North Africa accounted for 41% of total demand, followed by the UK (38%), Europe (9%), North America (8%), and Asia (4%).
The 30.25-year unsecured and subordinated notes carry an initial yield of 6.625% with a non-call period of 7.25 years. Coupon payments, set to be distributed semi-annually, can be deferred for up to five years and are cumulative and compounding, offering Aldar additional financial flexibility.
In January 2025, Moody’s reaffirmed Aldar’s Baa2 credit rating with a stable outlook and assigned a Baa3 rating to the hybrid notes. This structure is considered 50% equity and 50% debt for rating purposes but remains non-dilutive for shareholders. Proceeds from the issuance will be used to pay down senior debt, preserving debt capacity to support Aldar’s future projects.
