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Clifford Chance advises Majid Al Futtaim on its milestone fourth Green Sukuk

6 June 2023

Clifford Chance advises Majid Al Futtaim on its milestone fourth Green Sukuk

Leading international law firm Clifford Chance has advised Majid Al Futtaim, the leading shopping mall, communities, retail and leisure pioneer across the Middle East, Africa and Asia, on the issuance of a US$500 million green sukuk.

Founded in Dubai in 1992 to bring the first shopping malls to the Middle East, Majid Al Futtaim has become a diversified lifestyle conglomerate spanning 16 countries and employs 46,000 people representing 114 nationalities, welcoming 600 million customers to its shopping malls, communities, retail and entertainment destinations each year

In 2019, Majid al Futtaim issued the first green sukuk by a GCC corporate, paving the way for subsequent successful green sukuk offerings. This transaction is Majid Al Futtaim's fourth green capital markets issuance in four years, marking a significant milestone in the company's sustainability journey and showcasing its dedication to environmental stewardship and social responsibility.

The newly issued 10-year sukuk was priced with a 5.000% profit rate, and was met with significant interest from local and international investors, reflecting the growing demand for sustainable investment opportunities and Majid Al Futtaim's strong reputation in the market. The transaction had an order book of around US$3 billion and pricing tightening from initial pricing guidance of 175bps over US Treasuries to final pricing of 140bps over US Treasuries.

The issuance forms part of Majid Al Futtaim's strategy to support its growth agenda and sustainability commitments, in line with the goals of the Paris Agreement, the UAE Government's Net Zero by 2050 Strategic Initiative and Majid Al Futtaim's pledge to become net positive in water consumption and carbon emissions by 2040 as well as eliminate single-use plastic in all its operations by 2025. The proceeds of the issuance will be utilized to finance and refinance a portfolio of eligible green projects, including renewable energy initiatives, energy-efficient buildings, sustainable water management systems, and other environmentally friendly projects.

Clifford Chance's team comprised partner and Head of Middle East Capital Markets, Stuart Ure (Dubai), Pearl Mahaga (Senior Associate, Dubai), Benedetta Tola (Associate, Dubai) and Saby Mahmud (Trainee, Dubai).

Stuart Ure commented: "We are proud to have supported Majid Al Futtaim once again, on its historic fourth green issuance. This transaction not only demonstrates Majid Al Futtaim's commitment to sustainable financing but also underscores the investor demand for Shari'a-compliant investments in renewable energy and other sustainable assets."

Citigroup, HSBC and Standard Chartered Bank were joint global coordinators and joint lead managers on the issuance, along with Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Dubai Islamic Bank and First Abu Dhabi Bank, as joint lead managers and joint bookrunners and Bank ABC and ICBC.

Consistently ranked Band 1 in legal directories, Clifford Chance was awarded 15 awards at the Bonds, Loans & Sukuk Awards 2023 and was named Banking Legal Adviser of the Year at the Bonds, Loans & Sukuk Middle East Awards 2022, International Law Firm of the Year (Middle East) at the Middle East Legal Awards 2023 and Middle East International Law Firm of the Year at the Chambers Middle East Awards 2021.