Dar Al-Arkan Real Estate Development Company, a top Saudi property developer, said it has successfully redeemed its inaugural $600 million Sukuk issued in March 2007. The repayment was made on schedule, the company said in a statement.

Bahrain-based Unicorn Investment Bank was the joint lead manager, joint bookrunner and Shari’ah advisor to the Sukuk issue.

Issued by DAAR International Sukuk Company, the landmark three-year $600 million issue marked the first Sukuk to be issued by a Saudi company in the international capital markets.

Launched as a $425 issue, it received an overwhelming response from financial institutions across Europe, South East Asia and the GCC region, said a top official.

Commenting on the repayment, Yousef  Abdullah Al-Shelash, chairman of Dar Al-Arkan, said: 'We are pleased to report the successful repayment of our debut Sukuk and would like to thank our Sukuk holders for their confidence in Dar Al-Arkan.'

'The overwhelming response we received from the international financial community when we launched this Sukuk represented a vote of confidence not only in Dar Al-Arkan but also in the Saudi economy. We are committed to maintaining our leading role in providing affordable housing solutions that meet international standards to middle income families across the Kingdom of Saudi Arabia,' he added.

Majid Al Sayed Bader Al-Refai, managing director and CEO of Unicorn Investment Bank said the ability of Dar Al-Arkan to successfully meet its obligations at a time when a number of Sukuk issuers have either defaulted or are seeking restructuring bears testament to the strength of its business model and the Saudi economy in general.

'We are proud to have been associated with this transaction and would like to congratulate Dar Al-Arkan on the successful redemption of this groundbreaking issue,' he added

Ikbal Daredia, head of Capital Markets, Institutional Banking and Treasury at Unicorn and CEO of Unicorn International Islamic Bank Malaysia, said: “The ability of Dar Al-Arkan to successfully meet its obligations sends a positive signal to the international financial community and affirms the fundamental strength of the company’s  strategy.”

In January 2010, Moody’s Investor Service assigned a Ba2 rating to the largest developer in Saudi Arabia by market value. Moody’s noted that the Ba2 rating is one of the highest industry ratings; the mean rating of global homebuilding companies is Ba3.

The Ba2 rating also positions Dar Al-Arkan well above regional peers in the GCC countries. Standard & Poor’s Ratings Service has assigned a BB- rating to the company.-TradeArabia News Service