Dubai’s Emirates NBD successfully issues three-year Dhs1bn bond

Emirates NBD has successfully priced its inaugural Dhs1bn dirham-denominated bond.

The three-year bond – the first such issue by a UAE bank – saw strong demand with the order book peaking at over 1.65 billion, enabling Emirates NBD to tighten the price to a spread of 83 bps (basis points) over UAE Government Treasuries.

Regional investors contributed 72 per cent of the orderbook while international investors accounted for 28 per cent.

The issuance is the first dirham-denominated bond by a bank since the creation of a medium-term yield curve by the Ministry of Finance. Since May, the Ministry of Finance has issued a total of Dhs9bn in bonds in two, three and five-year tenors. This is the first dirham-denominated bond to be issued by a UAE corporation in over 10 years.

Read: UAE’s five-year tranche treasury bonds receive bids worth Dhs8.6bn in fourth auction

Supporting local corporations

Mohamed Bin Hadi Al Hussaini, Minister of State for Financial Affairs, said: “Following the successful launch of the Treasury Bonds Program of the Government of the UAE (T-Bonds), which aims to build the UAE dirham-denominated yield curve and develop the local debt capital market, we are pleased to see strong demand by regional and international investors on the first dirham-denominated issuance by a local bank.

“Emirates NBD’s dirham-denominated bond issuance is an important milestone in the development of the local currency bond market, and it aligns with the government’s objectives of strengthening the local financial markets and developing the investment environment, as well as supporting sustainable economic growth. We look forward to seeing more local corporations issuing bonds in local currency.”

Hesham Abdulla Al Qassim, vice chairman and MD of Emirates NBD, said: “We are extremely pleased with the strong demand for our inaugural dirham bond, with a range of UAE investors participating. This bond issue further deepens the local currency bond market and will help UAE corporations seeking to raise capital. The initiative is a testament to our commitment towards supporting the development of dynamic debt and equity capital markets in the UAE.”

Emirates NBD Capital, HSBC, Industrial and Commercial Bank of China, and Mashreq were joint lead managers and joint book runners for the bond.