DUBAI: Dar Al-Arkan Real Estate Development Co., Saudi Arabia’s largest listed property developer, may consider early repayment of a $450 million Islamic bond due to mature in February 2015, a company representative said.
Last December, Dar Al-Arkan repurchased 87 percent of a SR750 million ($200 million) sukuk due in April 2014. It left the remaining SR100 million of that issue to mature on schedule at the request of the investor holding it.
“We have set a precedent for repaying bonds ahead of schedule and we will consider doing so with the February 2015 issue,” the representative told Reuters on the sidelines of a financial conference in Dubai.
He stressed that no final decision on an early repurchase had been made, but it could make sense as a liability management exercise and as a way to signal to the market that the company could repay its debts comfortably.
Dar Al-Arkan has issued $750 million of a $1.2 billion debt issuance program which is valid until November 2014. It may make another issue under this program if market conditions are right, but no decision has been reached.
Dar Al-Arkan’s net profit climbed 9 percent from a year earlier to SR156.8 million in the fourth quarter of last year. The company cited higher margins on property sales and lower costs.
Company Chairman Youssef Al-Shelash told Reuters last October that the supply of housing in Saudi Arabia could lag demand for at least the next five years, creating lucrative opportunities for developers who could benefit from rapid population growth and a new mortgage law.