Abu Dhabi’s ADQ lists debut $2.5bn bonds on local bourse

Abu Dhabi’s ADQ, the smallest of the emirate’s three sovereign wealth funds, has listed a dual-tranche $2.5bn bond on the Abu Dhabi Securities Exchange (ADX). The notes were initially listed on the London Stock Exchange in April.

The fund sold a $1.25bn five-year portion at 80 basis points (bps) over US Treasuries and another $1.25bn 10-year tranche at 90 bps over the same benchmark.

The bond issuance was met with robust investor demand and was oversubscribed 4.4 times, underscoring confidence in ADQ’s credit profile and Abu Dhabi’s economic stability and prospects.

As an asset owner mandated to contribute to the sustainable development of Abu Dhabi’s economy, ADQ supports its portfolio companies in laying the foundations for future listings, optimising the funding structure, and upholding best-in-class corporate governance.

The fund, which contributed around 22% to the emirate’s non-oil GDP in 2023, holds assets including Emirates Water and Electricity Company, Emirates Nuclear Energy Corporation, Etihad Airways, and Abu Dhabi Airports, along with various agriculture, healthcare, and logistics enterprises.

Its portfolio features eight companies listed on ADX: TAQA, AD Ports Group, Agthia Group, Emirates Steel Arkan, PureHealth, E7 Group, Modon Holding, and Abu Dhabi Aviation.

Meanwhile, ADQ’s bond listing brings the total number of debt instruments on the Abu Dhabi bourse to 60.

Abu Dhabi Government listed bonds worth $5bn on the ADX in June. The five-year portion of the bond, valued at $1.75bn, was priced 35 basis points over US Treasuries, resulting in a yield of 4.97 per cent – a significant deviation from the initial guidance of 70 basis points. The second tranche, worth $1.5bn, has a yield of 5 per cent and matures in 2034.

The longest tranche, also $1.75bn, had a spread of 90 basis points and a yield of 5.5 per cent.

Similarly, Mubadala Investment Company listed a $5.3bn dual-currency bond on the local exchange earlier in 2024. The sovereign fund’s dollar—and dirham-denominated bonds, totalling $4.5bn and Dhs750m, respectively, were secondary listed through its issuing entity, Mamoura Diversified Global Holding.

First Abu Dhabi Bank, the UAE’s biggest bank by assets, listed a Dhs1.3bn green sukuk on ADX last November, Abu Dhabi Future Energy Company’s (Masdar) $750m debut green bond in October and Abu Dhabi National Energy Company’s (TAQA) $1.5bn dual-tranche bond in September 2023.

Read: Abu Dhabi Government lists $5.3bn bonds on local exchange