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Jafza issues US$650 million Sukuk due in 2019

Jafza's first deal in international debt capital markets since 2007.
Salma Ali Saif Bin Hareb, Jafza CEO.
Salma Ali Saif Bin Hareb, Jafza CEO.

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Jebel Ali Free Zone (Jafza) has successfully priced the issuance of US$650 million Sukuk Certificates (Sukuk) due in 2019, marking the company’s first US dollar-denominated issuance and its first transaction in the international debt capital markets since 2007.

The certificates pay a profit rate to investors of 7.0 per cent per annum. The proceeds of the Sukuk (a Sharia compliant bond) will be used to partly refinance Jafza’s outstanding Dh7.5 billion Sukuk due in November 2012, ahead of the stated maturity. Jafza will also contribute proceeds of Dh4.4 billion to a bank facility and its own cash sources towards the redemption

The transaction saw strong demand from regional and international investors, with “the order book 3.1 times subscribed”. The order book is well-diversified, both in terms of investor ethnicity and geographical location. European investors accounted for 26 per cent of the allocation, Asians at 7 per cent, US Offshore investors at 2 per cent and Middle Eastern investors made up the balance of 65 per cent.

Salma Ali Saif Bin Hareb, CEO of Jafza said: “The success of this transaction is a testament to the confidence that investors have in the Jafza credit story, which is underpinned by strong, recurring cashflows as well as a strategic importance to the overall development of the Emirate of Dubai.

“This successful fund-raising exercise is another step towards execution of Jafza’s refinancing and deleveraging strategy and the positive response from the market to the transaction and Jafza strategy is especially encouraging.”

 

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