Dar Al Arkan Real Estate Development Company slated to sell benchmark-sized Sukuk this week (By IFN)

Dar Al Arkan Real Estate Development Company slated to sell benchmark-sized Sukuk this week

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SAUDI ARABIA: It has been reported that Dar Al Arkan Real Estate Development Company, Saudi Arabia’s largest real estate developer by market value, will be issuing a “benchmark-sized” Sukuk this week, to fund its projects. A benchmark-sized Sukuk typically ranges between US$500 million to US$1 billion. However, it has come to light that the real estate company’s shares fell by 4.7% yesterday — the largest dip since January after a 10% gain this year — on the back of the company’s decision to not distribute dividends for last year. The company’s first quarter profits for the period ended the 30th April also showed a 19% decline in assets, following dismal results in 2012. Last year, the company recorded a drop in net profits by 50%, while its net income fell to SAR144 million (US$38.39 million) from SAR290 million (US$77.32 million). In January, it was reported that the company had planned to roll over its short-term Murabahah deals with Saudi Arabian and international banks. Talk of the Sukuk issuance had first begun circulating in the market in mid-February this year, with claims that the company would use proceeds from the issuance to pay its first cash dividend since 2010. The five-year issuance is said to have a yield of 6.25%. The banks which have been mandated for the deal are Bank Alkhair, Deutsche Bank, Emirates NBD, Goldman Sachs, Masraf Al Rayan and QInvest. The firm has so far raised four Sukuk, including one domestic issuance, totalling at US$2.25 billion.