Reuters, DUBAI, July 8 – According to banking sources, a $350 million sukuk contract from Private Department of Sheikh Mohamed Bin Khalid Al Nahyan LLC (PD), a modest real estate company in Abu Dhabi owned by members of the royal family, was canceled late Wednesday. PD was looking for up to $600 million and would have most likely had a positive perspective on its ‘Ba1’ bond. Three individuals claimed Moody’s modified its rating from stable to negative if the deal was priced at $350 million, and two of them said it was likely to be downgraded. find out more “It was the decision of Sh. Mohammed bin Khalid Al Nahyan’s Private Department to cancel the transaction because the monies obtained did not meet the Private Department’s objective and vision as presented to the possible investors,” the business said in response to a Reuters request for comment. Moody’s did not respond to a request for comment. The company said it had decided not to proceed with the offering in a note seen by Reuters that was emailed to investors just before midnight, after allocations were distributed, and that it would reconsider the fundraising plans “at an opportune time, according to market conditions.” According to a Reuters assessment of the sukuk’s investor presentation, the company’s total debt was 2.17 billion dirhams ($590.86 million) at the end of 2020. “I believe the rating was based on their having a little extra cash for additional spending,” one of the sources said, adding that if the company did not have enough cash for its initiatives, it would have a significant impact on its credit rating. The transaction was coordinated by Emirates NBD Capital (ENBD.DU) and First Abu Dhabi Bank (FAB.AD), with participation from Abu Dhabi Commercial Bank (ADCB.AD), Dubai Islamic Bank (DISB.DU), and Mashreq (MASB.DU). find out more Bond deals are rarely canceled, and in the last several years, there have only been a few instances among Gulf issuers, as investor demand has been high due to the large yields these transactions offer. Davide Barbuscia and Yousef Saba contributed reporting.
Mark Potter did the editing.
The Thomson Reuters Trust Principles are our standards./n
