The Abu Dhabi Developmental Holding Company (ADQ) announced the successful pricing of its second bond issuance. The $2 billion bond, to be listed on the London Stock Exchange (LSE), follows ADQ’s debt capital markets debut issuance in May 2024.
The new issuance will further diversify ADQ’s funding sources and contribute to financing strategic growth initiatives within the group. Moreover, it will support building the company’s long-duration credit curve for investors.
“ADQ’s second bond issuance under its global medium-term note program reflects our commitment to forward-looking financial management and a strong capital structure,” stated Marcos de Quadros, group chief financial officer at ADQ.
Dual-tranche offering
The bond issuance saw an oversubscription of 4.1 times, reflecting confidence in ADQ’s strong credit profile and the financial resilience of Abu Dhabi’s economy. The dual-tranche offering includes a $1 billion seven-year bond due 2031 and a $1 billion 30-year bond due 2054, with annual coupon rates of 4.375 percent and 5.250 percent, respectively.
In addition, the issuance accomplished broad institutional distribution, attracting major investors across the U.S., Europe, the Middle East and Asia. The strong and high-quality demand enabled the transaction to tighten 30 basis points from initial pricing thoughts to final pricing.
“With this issuance, we now offer an expanded bond curve to investors. We appreciate the impressive market response, demonstrated in the oversubscription of 4.1 times across both tranches,” added de Quadros.
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ADQ’s inaugural $2.5 billion bond
Earlier this year, ADQ completed the issuance of its inaugural $2.5 billion bond, which has a primary listing on the LSE and a secondary listing on the Abu Dhabi Securities Exchange (ADX). The dual-tranche bond included five- and 10-year tenors and achieved an oversubscription of more than 4.4 times.
As of June 30, 2024, ADQ’s total assets amounted to $225 billion. The company has shareholdings in more than 25 portfolio companies, structured into seven economic clusters which cover key sectors of the Abu Dhabi economy. This includes numerous critical infrastructure assets spanning utilities, transportation, healthcare, agriculture, and real estate.
Moody’s rates ADQ at Aa2 while Fitch gave the company an AA rating, both with a stable outlook.
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