Abu Dhabi-based Ittihad International Investment LLC has secured a $450 million sustainability-linked revolving credit facility with a consortium of local banks. The facility was arranged by Emirates NBD, Commercial Bank of Dubai, and First Abu Dhabi Bank, serving as mandated lead arrangers and bookrunners, as well as sustainability joint coordinators. Additionally, Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, and Emirates Islamic acted as joint arrangers.
The senior unsecured committed RCF has a five-year tenure, with an initial commitment of three years and an option for two one-year extensions at the discretion of the participating banks. It also features an “accordion” option, allowing for an increase in the facility size.
This financing aligns with Ittihad’s strategic focus on sustainability and environmental, social, and governance principles. In October 2024, the company received a provisional ‘AAA’ ESG rating from MSCI, positioning it among the most sustainable industrial conglomerates in the UAE and globally. This rating reflects Ittihad’s commitment to high standards of corporate governance and its efforts to drive environmental and social progress.
Ittihad’s portfolio spans four key sectors: Consumer Goods Manufacturing, including paper and tissue production, as well as raw materials used in detergent production; Infrastructure and Building Materials Manufacturing, encompassing copper rods, cement, and rebar production; Business Services, including operation and maintenance of infrastructure and environmental services; and Healthcare Services, managing laboratories and radiology centers, as well as medical equipment and supplies.
The company contributes 4% of the UAE’s non-oil manufacturing sector exports, supplying products and services to over 50 countries globally. Its growth strategy aligns with the UAE’s ‘Operation 300bn’ initiatives, aimed at advancing the industrial sector and diversifying the national economy.
In July 2024, Ittihad successfully completed a $100 million tap issue of its $350 million sukuk, originally issued in November 2023. The sukuk, carrying a coupon interest rate of 9.75%, will mature in November 2028. The tap issuance was placed at an issue price of 102.1, resulting in a yield of 9.0%, reflecting an improvement over the original terms. The proceeds from this issuance were utilized to refinance existing debt, thereby extending the company’s debt maturity profile and enhancing its financial flexibility.
The $450 million sustainability-linked RCF underscores Ittihad’s commitment to integrating sustainability into its financial strategies. By linking the credit facility to sustainability targets, the company aims to align its financial practices with its ESG objectives, promoting responsible growth and value creation for stakeholders.
The involvement of prominent local banks in arranging and coordinating the facility highlights the financial sector’s support for sustainable initiatives within the UAE. This collaboration reflects a broader trend of integrating ESG considerations into corporate financing, encouraging companies to adopt sustainable practices.
Ittihad’s strategic initiatives, including the recent credit facility and its ‘AAA’ ESG rating, position the company to capitalize on opportunities in sustainable development. By embedding ESG principles across its operations, Ittihad aims to drive long-term value creation while contributing to environmental and social progress.
The company’s diversified portfolio and commitment to sustainability have garnered confidence from investors and financial institutions alike. The successful completion of the sukuk tap issuance and the arrangement of the sustainability-linked RCF demonstrate Ittihad’s robust financial standing and its dedication to responsible growth.
