Abu Dhabi’s Aldar repays US$1.25 billion bond

ABU DHABI: Aldar Properties, Abu Dhabi’s leading listed property development, investment and management company, has announced that it has repaid a US$1.25bn bond as the company pushes ahead with a strategy to deleverage, reduce its cost of borrowing and build a strong platform for growth.

The bond that matured in May 2014 carried an annual interest cost of 10.75% and was repaid using cash and by drawing down on committed liquidity facilities that carry an annual interest cost of 1.7%.

Aldar says its weighted average cost of debt has reduced from 5.8% to 2.8%.

“The bond was repaid using cash and by drawing down on committed liquidity facilities that carry an annual interest cost of 1.7%. Aldar has now successfully refinanced or agreed new terms on all its financing facilities since the merger and has achieved significant interest savings. Aldar ‘s weighted average cost of debt has reduced from 5.8% to 2.8%.

Since completing the merger last year, Aldar Properties has reduced its gross debt from AED 14.2 billion to AED 10.1 billion and following the repayment of the bond continues to maintain a strong cash position of AED 3.8 billion of cash as of 31 May 2014. Aldar is now forging ahead with new developments at a time when demand is growing for high-quality real estate in Abu Dhabi. The company has nearly AED 40.7 billion in assets, including 77 sq. m. of land for development.

Abubaker Seddiq Al Khoori, Chairman of Aldar Properties , said, “The bond repayment marks an important milestone in our strategy to deleverage and reduce borrowing costs, and we are entering the next phase of Aldar ‘s growth from a position of financial strength. We have seen very strong demand for the three new developments that we recently launched, with a combined gross development value of approximately AED 5 billion.

Meanwhile, we are assessing 20 other development projects as we look to monetise Aldar ‘s extensive land bank and continue to create significant value for our shareholders.” Greg Fewer, Chief Financial Officer of Aldar Properties , said, “Our strategy to continue deleveraging the business and reduce the company’s annual interest payment is well advanced. Thanks to our refinancing initiatives the company will now pay AED 700 million less annually to service our debts – a reduction of 70% over just one year. We continue to remain focused on deleveraging the business and optimising our cost of capital as it is an important driver of value for our shareholders.” Aldar unveiled three new residential developments in April, with the first sales launch – for the Al Hadeel development at Al Bandar on Al Raha Beach – achieving a sell-out in one day.

The company has experienced strong sales and leasing activity across its property portfolio this year, reflecting a pick-up in the Abu Dhabi market, driven by a sustained period of robust GDP growth as the Emirate continues to diversify its economy.

Since completing the merger last year, Aldar Properties has reduced its gross debt from AED14.2bn to AED10.1bn and following the repayment of the bond continues to maintain a strong cash position of AED3.8 billion of cash as of 31 May 2014.

Aldar s refinancing initiatives have reduced the overall cost of borrowing from AED1bn to AED300 million representing a reduction of 70%.

“The bond repayment marks an important milestone in our strategy to deleverage and reduce borrowing costs, and we are entering the next phase of Aldar ‘s growth from a position of financial strength.” “We have seen very strong demand for the three new developments that we recently launched, with a combined gross development value of approximately AED5bn. Meanwhile, we are assessing 20 other development projects as we look to monetise Aldar ‘s extensive land bank and continue to create significant value for our shareholders,” said H.E. Abubaker Seddiq Al Khoori, chairman of Aldar Properties.

Aldar is now forging ahead with new developments, with nearly AED40.7bn in assets, including 77m2 of land for development.

SOURCE: WAM