Binghatti secures strong demand for debut long sukuk

Dubai-based property developer Binghatti has priced a $500 million five-year sukuk after attracting demand that significantly exceeded the issue size, underscoring sustained investor appetite for higher-yield Gulf credit despite tighter global financial conditions. The Islamic bond was priced on Thursday with a profit rate of 8.375 per cent, equivalent to a spread of 461.3 basis points over US Treasuries, according to transaction details.

Orderbooks climbed beyond $2.2 billion excluding joint lead manager interest, allowing the issuer to tighten pricing from initial guidance in the area of 8.875 per cent. The scale of demand enabled Binghatti to complete the transaction at the tighter end of expectations, reflecting confidence in the company’s credit profile and the depth of liquidity in the sukuk market.

The Regulation S senior unsecured sukuk was issued through Binghatti Sukuk 2 SPV and carries a BB- rating from Fitch Ratings. Proceeds will be used for general corporate purposes, including refinancing and ongoing development activity, in line with the issuer’s stated funding strategy.

The transaction marks a notable step for Binghatti in the international debt markets, extending its maturity profile and diversifying funding sources at a time when regional developers are increasingly tapping capital markets to support expansion. The company has built a prominent presence in Dubai’s residential sector, with a portfolio that includes high-rise towers and branded developments, and has continued to announce new projects despite a more selective global financing environment.

Market participants said the strong response to the deal highlighted the resilience of demand for Gulf issuers offering yield premiums, particularly in the sukuk segment where supply remains constrained relative to appetite. While global interest rates remain elevated, investors have shown a willingness to allocate to well-known regional names with visible pipelines and established delivery records.

The pricing also reflects broader trends in the Middle East’s Islamic finance market, where sukuk issuance has remained active as corporates and sovereign-related entities seek to lock in longer-tenor funding. Dubai-based issuers, in particular, have benefited from the emirate’s status as a hub for Islamic capital markets and from a track record of orderly execution in both conventional and Shariah-compliant formats.

Analysts noted that spreads on sub-investment-grade regional issuers have tightened compared with levels seen earlier in the global rate-tightening cycle, even as absolute coupons remain high by historical standards. This has created an environment in which issuers can achieve funding at levels viewed as acceptable, while investors secure returns that compare favourably with similarly rated credits elsewhere.

For Binghatti, the deal provides additional balance-sheet flexibility as it navigates a competitive development landscape. The company has expanded its footprint through partnerships and branded collaborations, positioning itself in segments that have continued to attract end-user and investor interest. Access to longer-term funding is seen as critical in managing construction timelines and cash flows, particularly as delivery schedules extend over several years.

The sukuk’s BB- rating places it within the high-yield category, a segment that has drawn increased attention from asset managers seeking diversification beyond traditional investment-grade paper. The Gulf’s relatively stable macroeconomic backdrop and supportive regulatory environment for Islamic finance have been cited as factors underpinning this interest.