The Ministry of Finance, on behalf of the Federal Government of the United Arab Emirates, completed the sale of a USD 1.5 billion 10-year bond with a September 2033 maturity date and a yield of 4.917%, or a spread of 60 basis points over the United States Treasury bonds. The London Stock Exchange (LSE) and Nasdaq Dubai will both list the bond.
The transaction was solidly oversubscribed by five times by the time the final guidance was released, generating significant demand from domestic, regional, and worldwide investors.
The order book attracted high-quality investors and topped USD 7.4 billion. This demonstrates both the UAE’s growing appeal to foreign investors and its determination to keep up its ranking as one of the most competitive and technologically sophisticated economies in the world.
Mohammed bin Hadi Al Hussaini, Minister of State for Financial Affairs, stated, “The successful completion of another sovereign bond by the UAE, is a testament that the UAE remains an attractive destination for investors and one of the World’s most attractive investment hubs.”
“The UAE has once again produced impressive results in its most recent bond sale, drawing a sizable and diverse investor demand,” he continued further.
With final pricing at US Treasuries + 60 bps, the high order book caused a price compression of 25 bps from the initial pricing guide.
Abu Dhabi Commercial Bank PJSC, BNP Paribas, Citigroup Global Markets Limited, Emirates NBD Capital, First Abu Dhabi Bank PJSC, HSBC Bank, Goldman Sachs, Mashreq Bank PSC, and Mizuho were part of a syndicate of joint lead managers and book runners that organized and offered the issue.
The 10-year bonds were allocated geographically as follows: 45% for Middle Eastern investors, 21% for Americans, 11% for Asian investors, 9% for UK investors, and 14% for European investors.
The final distribution of 10-year bonds was split up into the following categories: Banks and private banks received 61% of the total, followed by fund managers with 32%, pension funds with 4%, and the insurance industry with 3%.
By the credit rating of the Federal Government of the United Arab Emirates, the Notes will be rated AA- by Fitch and Aa2 by Moody’s.
The UAE’s high GDP per capita, creative policies, solid international ties, and capacity to resist economic and financial problems all contribute to the country’s strong international credit rating, which reflects the creditworthiness of the UAE.