Tabreed Secures Approval for $2 Billion Non-Convertible Debt Issuance

Dubai-listed National Central Cooling Company PJSC, known as Tabreed, has obtained shareholder approval to issue up to $2 billion in additional non-convertible debt instruments, including bonds or sukuk. The authorization was granted during the company’s Annual General Assembly meeting held on Tuesday. This strategic move aims to bolster Tabreed’s financial flexibility and support its ongoing expansion initiatives.

The planned debt issuance may occur in one or more tranches, providing the company with the agility to respond to market conditions and investment opportunities. Tabreed’s decision to pursue this substantial funding aligns with its commitment to enhancing infrastructure and expanding its footprint in the district cooling sector. The company has not specified a definitive timeline for the issuance but emphasized that the proceeds will be allocated towards financing new projects and refinancing existing obligations.

This development follows Tabreed’s successful issuance of a $700 million green sukuk earlier this month. The inaugural green sukuk attracted robust institutional demand from local, regional, and international investors, leading to order books exceeding 4.3 times the offering size and resulting in an oversubscription of nearly 2.6 times. The sukuk was competitively priced with a profit rate of 5.279%, achieving the highest tightening by any investment-grade regional sukuk issuance this year. The net proceeds from this offering are earmarked for financing or refinancing eligible green projects, underscoring Tabreed’s commitment to sustainable development.

Tabreed’s Chief Executive Officer, Khalid Al Marzooqi, expressed satisfaction with the outcome of the green sukuk issuance, stating that the overwhelming investor confidence reflects the company’s strong credit fundamentals and its pivotal role in the region’s energy efficiency landscape. He highlighted that the funds raised will enable Tabreed to pursue environmentally sustainable projects, aligning with global trends towards green financing.

The company’s solid financial standing is further evidenced by its investment-grade credit ratings from Moody’s and Fitch , which are consistent with its corporate ratings. These ratings reflect Tabreed’s stable cash flows, strong market position, and prudent financial management. The planned $2 billion debt issuance is expected to leverage these strengths to secure favorable terms in the capital markets.

Tabreed has a history of successful debt issuances, including a $500 million sukuk in October 2018 and a $500 million bond in October 2020. These instruments have been instrumental in financing the company’s growth and operational enhancements. The forthcoming debt issuance is anticipated to follow a similar trajectory, providing the necessary capital to support Tabreed’s strategic objectives.