Abu dhabi: Aldar Properties has issued US$1.0 billion in subordinated hybrid notes to Apollo Global Management through a private placement, raising additional capital to support its growth momentum. The transaction optimizes Aldar's capital structure with notes issued at the Aldar level, and net proceeds injected as equity into Aldar Investment Properties (AIP), which holds income-generating real estate assets.
According to Emirates News Agency, this transaction includes the repayment of US$500 million perpetual subordinated notes issued by AIP to Apollo as part of the initial US$1.4 billion debt and equity investment by the asset management firm into Aldar in 2022. Following the transaction, Aldar's ownership in AIP has increased to 90%, with Apollo owning the remaining 10%.
The issuance, conducted to Apollo-managed affiliates, funds, and clients, represents the region's largest corporate hybrid private placement and brings Apollo's total investment in Aldar to approximately US$2.9 billion since 2022. The transaction enhances the resilience of both Aldar's and AIP's capital structures and is intended to support Aldar's balance sheet strength and growth agenda, proving value accretive for Aldar shareholders.
Commenting on the transaction, Faisal Falaknaz, Group Chief Financial and Sustainability Officer at Aldar, stated that the transaction underscores the strength of the partnership with Apollo and the confidence of major institutional investors in Aldar's strategy, financial management, and growth trajectory. He emphasized that the issuance provides long-term, flexible capital that bolsters balance sheet resilience and supports Aldar's ability to capitalize on opportunities across core markets, increasing Aldar's share of stable, recurring income generated by AIP's portfolio.
Apollo Partner Jamshid Ehsani remarked that completing the fifth investment with Aldar showcases Apollo's capability to structure flexible capital solutions responsive to the needs of corporate clients and investors. He noted Aldar's robust performance and portfolio expansion since the first transaction in 2022, reflecting Apollo's ongoing commitment to Abu Dhabi and the broader region.
The hybrid notes issued to Apollo share characteristics with a recent US$1.0 billion public issuance by Aldar, featuring a longer non-call period of 10.25 years. In early January, Moody's reaffirmed Aldar's Baa2 credit rating and AIP's Baa1 credit rating, both with a stable outlook, and assigned a standalone credit rating of Baa3 to the publicly issued hybrid notes, with 50% equity credit. Citi acted as sole global coordinator, structuring agent, and rating advisor for Aldar's latest transaction with Apollo.
