Home Industry Finance UAE taps international bond markets with $1.5bn sale The bond will be listed on the London Stock Exchange and Nasdaq Dubai by Gulf Business September 19, 2023 Image courtesy: Haykal/ Getty Images The UAE has raised $1.5bn from a 10-year bond sale, which was oversubscribed by more than five times and attracted bids of over $7.4bn. The bond will be listed on the London Stock Exchange and Nasdaq Dubai and marks the country’s return to international debt markets for the first time in well over a year. “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,” said Mohamed bin Hadi Al Hussaini, the Minister of State for Financial Affairs. “The UAE has yet again achieved strong results in its recent bond offering attracting strong and diversified investors demand.” The notes will be rated AA- by Fitch and Aa2 by Moody’s, in line with the credit rating of the UAE. “The strong order book resulted in price compression of 25bps from the initial pricing guidance, with final pricing at US Treasuries plus 60 bps,” said Al Hussaini. 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 bond 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 security was arranged and offered through a syndicate of joint lead managers and bookrunners including Abu Dhabi Commercial Bank, BNP Paribas, Citigroup Global Markets, Emirates NBD Capital, First Abu Dhabi Bank, HSBC Bank, Goldman Sachs, Mashreq Bank and Mizuho. UAE’s strong international credit rating reflects 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. UAE Islamic bonds Meanwhile, the UAE’s debut auction of dirham-denominated Islamic treasury sukuk (T-sukuk) was oversubscribed by 7.6 times and attracted bids totalling $2.26bn (Dhs8.3bn) in May. The strong demand was across both tranches, with a final allocation of Dhs550m for the two-year tranche and Dhs550m for the three-year tranche with a total issuance of Dhs1.1bn. The lowest bid for the two-year tenor was at 3.90 per cent, with the weighted average bids at 3.96 per cent and the final uniform coupon rate fixed at 3.97 per cent. The lowest bid for the three-year tenor was at 3.62 per cent, with the weighted average bids at 3.66 per cent and the final uniform coupon rate fixed at 3.70 per cent. The Ministry of Finance, which is the issuer of the debt sale, said the T-sukuk will first be issued in two, three and five-year tranches, followed by a 10-year tenure sukuk at a later date. The finance ministry said the T-sukuk is dirham-denominated to develop the local bonds debt market and support the mid-term yield curve. Read: Global outstanding sukuk volume breaks $800bn barrier Tags Conventional bonds London Stock Exchange Nasdaq Dubai UAE You might also like Tackling the surge in fraud during UAE’s peak shopping seasons UAE insurance sector reports Dhs2.5bn in profits in 2023: CBUAE OPEC+ doing ‘noble’ job of balancing oil market, says UAE UAE cuts petrol, diesel prices for October 2024