UAE Successfully Closes $1.5 Billion Dollar-Denominated 10-Year Bond Offering

The Ministry of Finance has successfully concluded its issuance of a US dollar-denominated 10-year bond worth $1.50 billion, set to mature in July 2034. The bond, which offers a yield of 4.857 percent, was issued at a spread of 60 basis points over US Treasuries. It will be listed on both the London Stock Exchange and Nasdaq Dubai.

The bond issue attracted significant interest from high-quality investors, with the order book reaching $6.50 billion, oversubscribing by more than four times the final guidance. This strong demand underscores the UAE's growing appeal to both domestic and international investors, highlighting the country's commitment to maintaining its status as one of the world's most competitive and advanced economies.

The geographic distribution of the 10-year bonds was diverse: 38 percent went to investors from the Middle East, 34 percent to American investors, 18 percent to UK investors, 7 percent to European investors, and 3 percent to Asian investors. This broad interest demonstrates the global confidence in the UAE's economic stability.

Mohamed Hadi Al Hussaini, Minister of State for Financial Affairs, stated, "The successful completion of another sovereign bond by the UAE is a testament to our nation’s enduring attractiveness to investors and our position as one of the world’s premier investment hubs." He further added, "The UAE has once again achieved outstanding results in its recent bond offering, attracting strong and diversified investor demand. The robust order book led to price compression of 30 basis points from the initial pricing guidance, with the final pricing set at US Treasuries plus 60 basis points."

The Notes will be rated AA- by Fitch and Aa2 by Moody's, aligning with the credit rating of the Federal Government of the United Arab Emirates. These ratings reflect the UAE's creditworthiness, driven by its high GDP per capita, innovative policies, strong international relationships, and resilience to economic challenges.

The final allocation of the bonds by investor type was also varied: 56 percent went to fund managers, 40 percent to banks and private banks, 1 percent each to pension funds and insurance companies as well as central banks and sovereign wealth funds, with other sectors taking up the remaining 2 percent.

Key Players in Bond Issuance

The joint lead managers and book-runners for this transaction were Crédit Agricole Corporate and Investment Bank, Emirates NBD Capital Limited, First Abu Dhabi Bank P.J.S.C., HSBC Bank plc., J.P. Morgan Securities plc., and Standard Chartered Bank. Their involvement ensured a smooth process for this significant financial undertaking.

This overwhelming response from investors highlights not only their confidence in the UAE's economic policies but also their trust in its future growth prospects. The successful bond issuance is a clear indicator of the nation's robust financial health and strategic foresight.

With inputs from WAM