ADQ Successfully Prices US$2 Billion Dual-Tranche Bond Amid Strong Investor Demand

Abu Dhabi Developmental Holding Company PJSC (ADQ) has successfully priced a US$2 billion bond. This marks ADQ's third venture into international debt capital markets, aiming to diversify its funding sources. The funds will support growth and projects aligned with ADQ’s long-term goals. The issuance attracted significant interest, highlighting investor confidence in Abu Dhabi’s economy despite market volatility.

The bond issuance was divided into two tranches: a five-year US$1 billion tranche with a 4.500% annual coupon and a ten-year US$1 billion tranche at 5.000%. This transaction achieved the lowest five-year yield and the second-lowest ten-year yield for non-Sukuk issuances from the GCC region in 2025. The order book exceeded US$7 billion, indicating an oversubscription of more than 3.5 times.

ADQ's latest bond offering saw broad institutional distribution across major regions, including Asia, the US, the Middle East, UK, and Europe. The transaction tightened by 30 basis points from initial pricing thoughts to final pricing. Notably, this issuance marked ADQ's widest distribution to Asian investors so far.

In September 2024, ADQ issued its second bond with seven- and thirty-year tenors, achieving an oversubscription of over 4.1 times. As of December 31st, 2024, ADQ's total assets reached US$251 billion, reflecting a compound annual growth rate of 23% over three years. The company focuses on critical infrastructure investments and global supply chains.

ADQ holds stakes in over 25 portfolio companies within eight economic clusters that span key sectors of Abu Dhabi's economy. The company is rated Aa2 by Moody’s and AA by Fitch, both with stable outlooks.

Executive Insights on Bond Success

Marcos de Quadros, Group Chief Financial Officer at ADQ, stated: "We are pleased to have, once again, achieved very broad investor diversification, as well as a strong level of oversubscription across both tranches. The success of this issuance demonstrates global investor confidence in ADQ's credit strength and continued recognition of our value proposition, as well as in the stability and long-term prospects of Abu Dhabi's economy."

This successful bond issuance underscores the appeal of investment-grade bonds from emerging markets like Abu Dhabi. It also highlights ADQ’s credit resilience during challenging market conditions while reinforcing its commitment to strategic growth initiatives.

With inputs from WAM