Ittihad Secures $450M Sustainability-Linked Credit Facility

Abu Dhabi-based Ittihad International Investment has successfully secured a $450 million sustainability-linked revolving credit facility (RCF) from local banks, further strengthening its financial position and enhancing liquidity. This strategic move aligns with the company’s broader investment vision, reinforcing its financial flexibility while supporting its $1.4 billion portfolio across multiple industries.

The credit facility, structured as a senior unsecured five-year RCF, includes a three-year initial commitment period, with the option for two one-year extensions at the discretion of the participating banks. It also features an accordion mechanism, allowing the facility size to be expanded if required. The deal is backed by key financial institutions, with Emirates NBD, Commercial Bank of Dubai, and First Abu Dhabi Bank acting as mandated lead arrangers and bookrunners. Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, and Emirates Islamic have also joined the arrangement as joint lead arrangers.

The financing is divided into two equal tranches of $225 million each, tailored to support different aspects of Ittihad’s financial strategy. The first tranche is allocated for general corporate purposes and replaces an existing undrawn RCF of $105 million. This provides Ittihad with greater flexibility in managing its ongoing business operations. The second tranche, designed to replace short-term working capital facilities, will be used to settle outstanding debt obligations amounting to $145 million, while the remaining $80 million will enhance liquidity, ensuring the company is well-positioned for future investments and operational demands.

CFO Zahi Abu Hamze highlighted the strategic significance of the facility, emphasizing its role in fortifying Ittihad’s financial foundation. He noted that this arrangement contributes to an improved credit rating, which is essential for a company operating across diverse sectors. Ittihad’s investment portfolio spans industrial manufacturing, infrastructure, building materials, business services, and healthcare, making financial stability a crucial factor in sustaining and expanding its market presence.

The sustainability-linked nature of the credit facility aligns with the company’s commitment to responsible investment and long-term value creation. Sustainability-linked financing has been gaining traction globally as corporations seek to integrate environmental, social, and governance (ESG) considerations into their financial strategies. By securing this facility, Ittihad signals its intent to align its growth with sustainability principles, an approach increasingly favored by investors and financial institutions.

This deal is part of a broader trend of businesses leveraging sustainability-linked credit facilities to optimize capital structures while maintaining a commitment to responsible business practices. Similar moves have been observed across various industries, with companies securing funding tied to ESG performance indicators. For example, Tetra Tech recently established a $1 billion sustainability-linked credit facility, demonstrating the growing importance of sustainability-focused financing in today’s corporate landscape.

Ittihad International’s decision to secure this facility comes at a time when businesses worldwide are navigating economic uncertainties while striving for financial resilience. The company’s proactive approach in strengthening its liquidity and capital structure ensures that it remains well-equipped to seize future growth opportunities. Additionally, the backing from leading financial institutions underscores the confidence of the banking sector in Ittihad’s financial health and strategic direction.

With this new credit facility in place, Ittihad is set to reinforce its market position and continue driving growth across its diversified investment portfolio. The company’s ability to secure competitive financing highlights its strong financial fundamentals and strategic foresight, positioning it for sustained success in the evolving business landscape.