The Abu Dhabi Department of Finance (DoF) has announced the issuance of $5 billion in U.S. dollar-denominated bonds in three different maturity periods.
The issuance received significant investor demand, highlighting the emirate’s commitment to its comprehensive economic development strategy.
The bonds comprised three tranches: a $1.75 billion tranche maturing in 5 years with a coupon rate of 4.875 percent, a $1.5 billion tranche maturing in 10 years with a coupon rate of 5.0 percent, and a $1.75 billion tranche maturing in 30 years with a coupon rate of 5.5 percent.
Read more: Heavy demand for UAE bonds despite recession fears
These rates further reflect spreads of 35 basis points over 5-year U.S. Treasuries, 45 basis points over 10-year Treasuries, and 90 basis points over 30-year Treasuries. The issuance was oversubscribed by 4.8 times, and the pricing was set below fair value.
Abu Dhabi achieved the narrowest spreads ever seen for 5, 10, and 30-year issuances in the Central and Eastern Europe, Middle East, and Africa (CEEMEA) region, demonstrating the high level of trust international investors have in the emirate’s financial stability, even during periods of heightened volatility. Both Standard & Poor’s and Fitch have assigned a credit rating of ‘AA’ to the bonds.
Strong demand from global investors
Jassem Mohammed Bu Ataba Al Zaabi, chairman of DoF, stated, “This successful issuance reflects strong demand from global investors and aligns with our conservative and optimal debt management approach, supported by our ‘AA’ credit ratings. The remarkable investor appetite and the record-breaking spreads in the CEEMEA region confirm the global investor community’s confidence in Abu Dhabi’s financial stability and positive long-term economic outlook.”
The bond issuance was managed by leading institutions such as Abu Dhabi Commercial Bank, Citi, First Abu Dhabi Bank, HSBC, JP Morgan, Morgan Stanley, and Standard Chartered Bank, acting as lead managers and underwriters.
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