Aldar Issues $1 Billion Hybrid Notes to Apollo in Region's Largest Corporate Private Placement

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Aldar issues $1 billion hybrid notes to Apollo. A landmark private placement in the UAE alternative investment sector.

Aldar Properties has issued $1 billion of subordinated hybrid notes to Apollo-managed funds via private placement, described as the region's largest corporate hybrid private placement to date.
Moody's has assigned the notes a Baa3 standalone rating with 50% equity credit, preserving Aldar's Baa2 investment-grade issuer rating.
Net proceeds were deployed as equity into Aldar Investment Properties (AIP), with $500 million used to repay earlier Apollo perpetual notes issued under the 2022 agreement.
Aldar's ownership stake in AIP has risen to approximately 90% following the transaction, with Apollo retaining a 10% equity interest.
Total Apollo commitments to Aldar now stand at approximately $2.9 billion across five transactions since 2022.
Citi acted as sole global coordinator, structuring agent and rating advisor on the deal.

Aldar Investment Properties and the Growing Role of Hybrid Capital in Abu Dhabi

This transaction brings total Apollo Global Management commitments to Aldar to approximately $2.9 billion since 2022, underscoring the growing appetite of global alternative asset managers for UAE real estate exposure. Net proceeds from the $1 billion issuance were deployed directly as equity into Aldar Investment Properties (AIP) - the group's income-generating platform holding a diversified portfolio of investment properties across Abu Dhabi and beyond.

For UAE-based advisors and institutional investors, the deal illustrates how subordinated hybrid notes are being used by investment-grade issuers to raise long-term capital without diluting shareholders or straining credit metrics. Moody's Baa2 investment-grade rating for Aldar remains intact, supported by the 50% equity credit treatment applied to the new hybrid instruments. Citi's role as sole global coordinator and structuring agent adds further institutional weight to what Gulf News describes as a deepening of the UAE's corporate hybrid capital market.

What Are Subordinated Hybrid Notes?

Hybrid notes are debt instruments that carry characteristics of both bonds and equity. They pay a regular coupon like a bond, but features such as long maturities, deferral options and deep subordination allow rating agencies to treat a portion of their value as equity when assessing a company's financial leverage. Moody's applies 50% equity credit to qualifying hybrids, meaning half the face value is counted as equity rather than debt in leverage calculations.

This structure gives investment-grade issuers a capital-efficient way to fund growth. By raising $1 billion through hybrid notes rather than issuing new shares or drawing on senior debt, Aldar strengthens its balance sheet while keeping its credit metrics within investment-grade parameters. The notes are subordinated - sitting below senior creditors but above common shareholders - and the 10.25-year non-call period means Aldar cannot redeem them before that point, reinforcing their treatment as long-term, quasi-equity capital.

Deal Structure and Capital Deployment

Aldar Properties PJSC issued the $1 billion notes to Apollo-managed affiliates, funds and clients in a privately negotiated transaction announced in February 2026. Moody's assigned the instruments a standalone credit rating of Baa3 - one notch below Aldar's issuer rating of Baa2 (stable) - with 50% equity credit, consistent with the structure of Aldar's earlier $500 million hybrid placement to Apollo in January 2025.

Net proceeds were injected as equity into Aldar Investment Properties (AIP), the group's income-producing real estate platform. Of the total proceeds, $500 million was used to repay perpetual subordinated notes previously issued by AIP to Apollo under the original 2022 financing arrangement. As a result, Aldar's ownership in AIP increased to approximately 90%, with Apollo retaining a 10% equity stake in the platform.

Faisal Falaknaz, Aldar's Group Chief Financial and Sustainability Officer, said the transaction highlights "the strength of our long-standing partnership with Apollo and the continued confidence of major institutional investors in Aldar's strategy, financial management and growth trajectory." He added that the issuance provides "long-term, flexible capital that enhances balance sheet resilience and supports our ability to capitalise on attractive opportunities across our core markets."

Apollo's Five-Deal Partnership with Aldar Since 2022

This $1 billion issuance is Apollo's fifth investment in Aldar since February 2022, when Apollo-managed funds committed $1.4 billion in strategic capital - including a $400 million equity investment in AIP. That initial package was described at the time as one of the largest foreign direct investments into Abu Dhabi's private sector. A further $500 million hybrid placement followed in January 2025, carrying identical structural features to the latest deal.

Apollo has characterised each transaction as part of a broader strategy of providing scaled, flexible capital solutions in Abu Dhabi and the wider UAE. The firm has also noted its multi-year partnership with Mubadala Investment Company focused on global origination opportunities, positioning these Aldar transactions within a larger institutional commitment to the Abu Dhabi ecosystem. With total commitments now reaching $2.9 billion, Apollo's relationship with Aldar represents one of the most significant ongoing institutional partnerships in the region's private capital markets.

Market Implications: Private Capital Meets UAE Real Estate

Citi served as sole global coordinator, structuring agent and rating advisor on the deal - the same role it fulfilled on the January 2025 hybrid issuance. The bank's continued involvement points to the institutionalisation of hybrid capital as a tool for UAE corporate finance, moving the market beyond its earlier reliance on conventional bank lending and public bond issuance.

Aldar has signalled a develop-to-hold pipeline valued at close to $5 billion, spanning Abu Dhabi's residential, commercial and logistics sectors. The hybrid structure supports this pipeline while maintaining the investment-grade credit metrics that underpin Aldar's access to a wide range of debt markets. According to Gulf News, the deal deepens the connection between UAE real estate and global institutional capital - particularly long-dated, yield-oriented mandates managed by large alternative asset managers.

For advisors monitoring UAE capital markets, the transaction is part of a broader pattern: bespoke private placements and hybrid structures are growing in the Gulf as high-quality issuers seek flexible funding and institutional investors seek attractive yields backed by real assets. The Aldar-Apollo relationship - now spanning four years and five transactions - offers a detailed case study in how repeat hybrid capital partnerships can be structured to serve both parties' long-term objectives.

What Clients are Asking their Advisors

What is a subordinated hybrid note and how does it differ from a regular corporate bond?

A subordinated hybrid note sits between senior debt and common equity in a company's capital structure. Unlike a standard bond, it typically carries a very long maturity and may include coupon deferral options, which allow rating agencies such as Moody's to treat a portion of its face value as equity when assessing leverage.

How does the 50% equity credit from Moody's affect Aldar's credit rating?

When Moody's grants 50% equity credit, it treats half of the hybrid note's $1 billion face value as equity rather than debt in its leverage calculations. This helps Aldar raise significant capital while protecting its Baa2 investment-grade issuer rating, since the effective debt burden looks lower than the nominal issuance size.

How does Aldar's private placement compare to issuing hybrid notes on the public bond market?

A private placement is negotiated directly with a single institutional investor - in this case Apollo - rather than sold to a broad market. This allows for bespoke terms and faster execution, though it typically means less liquidity for the instrument compared with a publicly listed bond.

What does Apollo's repeated investment in Aldar signal for foreign institutional capital in Abu Dhabi?

Five transactions and approximately $2.9 billion in committed capital since 2022 indicate sustained institutional confidence in Abu Dhabi's real estate fundamentals. It also signals that global alternative asset managers are actively deploying long-dated capital into the UAE through bespoke hybrid structures, rather than solely through public markets or traditional bank financing.