Image provided by: Haykal/Getty Images
The UAE raised $1.5 billion through a 10-year bond sale, which was oversubscribed more than five times and attracted bids of more than $7.4 billion.
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 over a year.
“The successful completion of another sovereign bond by the UAE is a testament to the fact that the UAE remains an attractive destination for investors and one of the most attractive investment centers in the world,” said Mohamed bin Hadi Al Hussaini, Minister of State for Financial Affairs.
“The UAE has once again performed strongly in its recent bond offering, attracting strong and diverse investor demand.”
The notes will be rated AA- by Fitch and Aa2 by Moody’s, consistent with the UAE’s credit rating.
“The strong order book resulted in a price compression of 25 basis points compared to initial forecasts, with final pricing on US Treasuries plus 60 basis points,” Al Hussaini said.
The geographic distribution of the 10-year bonds was as follows: 45 percent for investors from the Middle East; 21 percent for American investors; 11 percent for Asian investors; 9 percent for UK investors and 14 percent for European investors.
The final allocation of 10-year bonds by type was distributed as follows: 61 percent for banks and private banks; 32 percent for fund managers; 4 percent for pension funds and central banks, and 3 percent for the insurance sector.
The security was organized 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.
The UAE’s strong international credit rating reflects the UAE’s creditworthiness, which is based on high GDP per capita, innovative policies, strong international relations and an ability to withstand economic and financial challenges.
UAE Islamic Bonds
Meanwhile, the UAE’s first dirham-denominated Islamic Treasury sukuk (T-sukuk) auction was oversubscribed 7.6 times and attracted bids totaling $2.26 billion (8.3 billion dirhams) in May.
Strong demand was evident in both tranches, with a final allocation of 550 million Dhs for the two-year tranche and 550 million Dhs for the three-year tranche with a total issue of 1.1 billion Dhs .
The lowest bid for the two-year term was 3.90 percent, with weighted average bids of 3.96 percent and the final uniform coupon rate set at 3.97 percent.
The lowest offer for a three-year term was 3.62 percent, with weighted average offers of 3.66 percent and the final uniform coupon rate set at 3.70 percent.
The Ministry of Finance, which is the issuer of the debt sale, said the T-sukuk will first be issued in tranches of two, three and five years, followed later by a sukuk with a tenor of 10 years. The Ministry of Finance said the T-sukuk is denominated in dirhams to develop the local bond debt market and support the yield curve in the medium term.
Read: Global outstanding sukuk crosses the $800 billion mark
Image provided by: Haykal/Getty Images
The UAE raised $1.5 billion through a 10-year bond sale, which was oversubscribed more than five times and attracted bids of more than $7.4 billion.
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 over a year.
“The successful completion of another sovereign bond by the UAE is a testament to the fact that the UAE remains an attractive destination for investors and one of the most attractive investment centers in the world,” said Mohamed bin Hadi Al Hussaini, Minister of State for Financial Affairs.
“The UAE has once again performed strongly in its recent bond offering, attracting strong and diverse investor demand.”
The notes will be rated AA- by Fitch and Aa2 by Moody’s, consistent with the UAE’s credit rating.
“The strong order book resulted in a price compression of 25 basis points compared to initial forecasts, with final pricing on US Treasuries plus 60 basis points,” Al Hussaini said.
The geographic distribution of the 10-year bonds was as follows: 45 percent for investors from the Middle East; 21 percent for American investors; 11 percent for Asian investors; 9 percent for UK investors and 14 percent for European investors.
The final allocation of 10-year bonds by type was distributed as follows: 61 percent for banks and private banks; 32 percent for fund managers; 4 percent for pension funds and central banks, and 3 percent for the insurance sector.
The security was organized 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.
The UAE’s strong international credit rating reflects the UAE’s creditworthiness, which is based on high GDP per capita, innovative policies, strong international relations and an ability to withstand economic and financial challenges.
UAE Islamic Bonds
Meanwhile, the UAE’s first dirham-denominated Islamic Treasury sukuk (T-sukuk) auction was oversubscribed 7.6 times and attracted bids totaling $2.26 billion (8.3 billion dirhams) in May.
Strong demand was evident in both tranches, with a final allocation of 550 million Dhs for the two-year tranche and 550 million Dhs for the three-year tranche with a total issue of 1.1 billion Dhs .
The lowest bid for the two-year term was 3.90 percent, with weighted average bids of 3.96 percent and the final uniform coupon rate set at 3.97 percent.
The lowest offer for a three-year term was 3.62 percent, with weighted average offers of 3.66 percent and the final uniform coupon rate set at 3.70 percent.
The Ministry of Finance, which is the issuer of the debt sale, said the T-sukuk will first be issued in tranches of two, three and five years, followed later by a sukuk with a tenor of 10 years. The Ministry of Finance said the T-sukuk is denominated in dirhams to develop the local bond debt market and support the yield curve in the medium term.
