Tabreed's Sukuk bonds will be issued by Tabreed Financing Corporation (TFC), a special purpose company (SPC) incorporated in the Cayman Islands. The funds raised from the Sukuk bonds will be used to retire Tabreed's current debt of over Dh500 million and to finance its expansion in the UAE.

The issuer's initial assets are created through the sale of plant(s) by Tabreed. The plants thus transferred will be leased back to Tabreed through a lease agreement, and the lease proceeds from these assets will be distributed to the bondholders. The issuer is yet to announce the rate of return. In this sale and lease back arrangement, the issuer will act as the trustee on behalf of the certificate holders.

The initial assets transferred to the issuer will include two central cooling plants: the 7,000 refrigeration tonnes capacity Muroor Street Plant and the Zayeds Sports City Plant with similar capacity.

Tabreed Sukuk bond is one of the first corporate Islamic Sukuk offerings to be listed in Luxembourg stock exchange, and is expected to become a benchmark for future corporate Islamic Sukuk offerings. The issue will help Tabreed to consolidate its leading market position in the UAE.

The Sukuk bonds are issued in minimum denominations of $10,000 and are subject to a minimum investment of $100,000 initially. However, the certificates are transferable in lots worth $10,000.

Currently, Tabreed owns and operates13 district cooling plants mainly in Abu Dhabi and Dubai, with an installed capacity of 87,400 refrigeration tonnes and a potential capacity of 146,300 refrigeration tonnes. Over the next 30 months, nine new plants and expansion of two projects under construction will be commissioned with a projected installed capacity of 102,300 tonnes. Tabreed is capitalised at Dh500 million.