DUBAI, July 8 (Reuters) - A $350 million sukuk deal from
Private Department of Sheikh Mohamed Bin Khalid Al Nahyan LLC
(PD), a relatively small real estate player in Abu Dhabi owned
by members of its ruling family, was pulled late on Wednesday,
financial sources said.
PD had been seeking up to $600 million and would most likely
have had the outlook on its 'Ba1' Moody's rating changed to
negative from stable had the deal priced at the $350 million
size, three of the sources said, two of them adding it likely
faced a downgrade.
"It was the decision of the Private Department of Sh.
Mohammed bin Khalid Al Nahyan to cancel the transaction as the
proceeds received did not match with the plan and vision of the
Private Department as explained to the potential investors," the
company said in response to a Reuters request for comment.
Moody's declined to comment.
In a note seen by Reuters that was sent to investors just
before midnight, after allocations were out, the company said it
had decided not to proceed with the offering and it would
revisit the fundraising plans "at an appropriate time, subject
to market conditions".
The firm's total debt was 2.17 billion dirhams at the end of 2020, an investor presentation reviewed
by Reuters for the sukuk showed.
"I think the rating was predicated on them having a little
bit extra for additional spending," one of the sources said,
adding if the company did not have enough cash for its projects,
that would clearly impact its credit assessment.
Emirates NBD Capital and First Abu Dhabi Bank
were hired to coordinate the transaction, and Abu Dhabi
Commercial Bank, Dubai Islamic Bank and
Mashreq were also involved in the deal.
Bond deals are rarely cancelled, and there have only been
sporadic episodes among Gulf issuers in the past few years, as
investor demand is generally high due to the high yields these
(Reporting by Davide Barbuscia and Yousef Saba
Editing by Mark Potter)