UAE’s $1.5 billion dollar bond issue oversubscribed five times


The Federal Government of the UAE, represented by the Ministry of Finance, successfully closed its offering of a US dollar-denominated 10-years $1.5 billion bond maturing on September 2033, issued with a yield of 4.917 per cent representing a spread of 60 bps over US Treasuries. The bond will be listed on the London Stock Exchange (LSE) and Nasdaq Dubai.

The order book attracted high quality investors and exceeded $7.4 billion with the transaction being firmly oversubscribed by 5 times by the time the final guidance was disclosed, attracting strong demand from domestic, regional and international investors. This displays the UAE’s increasing attractiveness to foreign investors and the commitment of the UAE to maintain its status as one of the most competitive and highly advanced economies in the world.

Mohamed bin Hadi Al Hussaini, Minister of State for Financial Affairs, said: “The successful completion of another sovereign bond by UAE, is a testament that UAE remains an attractive destination for investors and one of the World’s most attractive investment hubs.”

He added: “The UAE has yet again achieved strong results in its recent bond offering attracting strong and diversified investors demand. The strong order book resulted in price compression of 25bps from the initial pricing guidance, with final pricing at US Treasuries plus 60 bps.”

The issue was arranged and offered through a syndicate of joint lead managers and bookrunners comprising of Abu Dhabi Commercial Bank PJSC, BNP Paribas, Citigroup Global Markets Limited, Emirates NBD Capital, First Abu Dhabi Bank PJSC, HSBC Bank plc, Goldman Sachs, Mashreq Bank PSC and Mizuho.

The geographic allocation of the 10-year bonds was distributed as follows: 45 per cent for investors from the Middle East; 21 per cent for American investors; 11 per cent for Asian investors;9 per cent for investors from the UK; and 14 per cent for European investors. The final 10-year bonds allocation by type was distributed as follows: 61 per cent for banks and private banks; 32 per cent for fund managers; 4 per cent for pension funds and central banks; and 3 per cent for the insurance sector.

The Notes will be rated AA- by Fitch, and Aa2 by Moody’s, in line with the credit rating of the Federal Government of the United Arab Emirates. UAE’s strong international credit rating reflect the creditworthiness of the UAE which is driven by the high GDP per capita, innovative policies, strong international relationships, and ability to withstand economic and financial challenges.