The Ministry of Finance recently closed a successful offering of a US dollar-denominated 10-year US$1.50 billion bond, maturing in July 2034. The bond was issued with a yield of 4.857 per cent, representing a spread of 60 basis points over US Treasuries. It will be listed on the London Stock Exchange (LSE) and Nasdaq Dubai. The bond offering attracted high-quality investors, with the order book reaching US$ 6.50 billion, oversubscribing by more than four times the final guidance.
According to Mohamed Hadi Al Hussaini, Minister of State for Financial Affairs, the successful completion of the sovereign bond by the UAE demonstrates the nation’s attractiveness to investors and its position as a premier investment hub globally. The bond offering saw a robust order book, leading to a price compression of 30 basis points from the initial pricing guidance, with the final pricing set at US Treasuries plus 60 basis points. The joint lead managers and book-runners on the transaction included notable financial institutions like 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.
The geographic distribution of the 10-year bonds saw 38 per cent going to investors from the Middle East, 34 per cent to American investors, 18 per cent to investors from the UK, 7 per cent to European investors, and 3 per cent to Asian investors. In terms of investor type, 56 per cent went to fund managers, 40 per cent to banks and private banks, 1 per cent to pension funds and insurance, 1 per cent to central banks and sovereign wealth funds, and 2 per cent to other sectors. 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 strong international credit ratings reflect the UAE’s creditworthiness, driven by its high GDP per capita, innovative policies, strong international relationships, and resilience to economic and financial challenges. The success of the bond offering reaffirms the UAE’s position as an attractive investment destination and highlights the confidence of global investors in the country’s economic stability and growth potential. Overall, the issuance of the 10-year bond serves as a testament to the UAE’s financial strength and solid standing in the global financial markets.
