IslamicFinance.de

Saudi Arabia's Dar Al-Arkan Real Estate Development announced the listing of a $600 million Sukuk on Nasdaq Dubai. The five-year Sukuk was more than 2.5 times oversubscribed and received significant interest from Middle Eastern, European and Asian investors. This issue was Dar Al Arkan’s 10th issue since 2007 and the 6th tranche of its current $2 billion program. The issue is for a 5 year term due in February 2025 with a coupon rate of 6.75%. Dar Al-Arkan’s assets include about 12.4 million square meters of projects under development. The company has handed over 15,000 residential units in Saudi Arabia and holds a land bank with a book value of around SR17 billion.

Dar Al-Arkan Real Estate Development Company paid on time, 16th of August 2011, USD 24.2 million due as semiannual payment for its Sukuk IV issuance maturing in 2015.

Moody's Investors Service has today downgraded the Ba2 ratings for Dar Al-Arkan Real Estate Development Company, Saudi Joint Stock Company , Dar Al-Arkan International Sukuk Company II and the US$450 million USD Certificates ("sukuk") to Ba3. The outlook is stable.
The reason is a combination of:
(1) DAAR's weaker than anticipated operating performance continuing in the third quarter of 2010 attributed to lower land sales, resulting in a departure from Moody's original expectations where land sales are an important part of the funding mix;
(2) DAAR's weaker than anticipated financial metrics, such as Moody's adjusted debt to book capitalisation (LTM 35.3% per end of September 2010), or FFO/Debt (LTM 18.4% per end of September 2010) which are not in alignment with Moody's guidelines for the Ba2 rating category;
and (3) the negative free cash flows DAAR has generated over the first nine months of 2010