Charlie Walker, deputy CEO of the London Stock Exchange (LSE), remarked that the UAE is solidifying its position as a premier economic force in the Middle East and North Africa (MENA) region, significantly contributing to the bond issuance market with the London Stock Exchange Group (LSEG).
Also, Walker stated that the UAE is actively promoting economic development in the region through innovative solutions and strategic collaborations, capitalizing on its advanced infrastructure and robust capital markets. Walker underscored that the UAE is enhancing its status as both a regional and global economic leader, playing a pivotal role in worldwide economic transformation.
Bond issuance dominance
The Deputy CEO, LSE, noted that the UAE represents approximately 39 percent of total bond issuances within the region, showcasing its capacity to attract essential capital for major strategic projects. He highlighted that since the start of this year, the UAE has successfully completed 37 bond issues amounting to a total of $18.51 billion, positioning itself at the forefront of debt instrument issuance in the Middle East and Africa.
Strategic partnerships and policies
Additionally, Walker attributed this achievement to robust government policies and strategic partnerships with global organizations like the LSEG, which serves as an optimal platform for UAE companies and government bodies to tap into international capital markets.
Collaboration with ADX
Walker mentioned that the collaboration between the LSEG and Abu Dhabi Securities Exchange (ADX) is a strategic initiative aimed at bolstering the financial infrastructure in both the UAE and the broader region. He also pointed out that the FTSE ADX index series offers investors a dependable benchmark for monitoring the performance of key sectors in Abu Dhabi, enabling informed investment choices.
Commitment to responsible investment
In addition, Walker noted that the introduction of the FTSE ADX ESG Index signifies the UAE’s dedication to fostering responsible investment practices, equipping investors with tools to align their portfolios with global environmental and social governance objectives.
Supporting sustainable investment
Walker added that through this partnership, LSEG and ADX are cultivating a robust and competitive financial market that will bolster the UAE’s economic growth and its ambitions to emerge as a global hub for sustainable investment.
Role of LSE in financing
Moreover, Walker emphasized that the LSE has become a vital platform for Emirati companies seeking financing for ambitious projects in renewable energy, infrastructure, and technology. He provided an example of Masdar, which successfully raised $1 billion through green bonds in 2023, underscoring the UAE’s commitment to renewable energy and sustainability objectives.
Growth in sustainable financial instruments
Furthermore, Walker highlighted the LSE’s role as a key partner in the development of the UAE’s capital market, particularly as demand for sustainable financial instruments like sukuk and green bonds continues to rise. He noted that the region has experienced remarkable growth in financial issuances, with sukuk issuances in the Middle East nearing $80 billion.
Successful second bond issuance
Last month, the Abu Dhabi Developmental Holding Company (ADQ) announced the successful pricing of its second bond issuance. This $2 billion bond, set to be listed on the London Stock Exchange (LSE), follows ADQ’s initial foray into debt capital markets with its issuance in May 2024.
Diversifying funding sources
The new issuance aims to further diversify ADQ’s funding sources and will contribute to financing key growth initiatives within the organization. Additionally, it will help establish a long-duration credit curve for investors.
Strong demand and oversubscription
The bond issuance was met with significant interest, achieving an oversubscription of 4.1 times, which underscores confidence in ADQ’s robust credit profile and the financial stability of Abu Dhabi’s economy. The dual-tranche offering consists of a $1 billion seven-year bond maturing in 2031 and a $1 billion 30-year bond maturing in 2054, with annual coupon rates of 4.375 percent and 5.250 percent, respectively.
Broad institutional distribution
Furthermore, the issuance achieved broad institutional distribution, attracting major investors from the U.S., Europe, the Middle East, and Asia. The strong demand allowed the transaction to tighten by 30 basis points from initial pricing expectations to final pricing.
Inaugural bond issuance
Earlier this year, ADQ successfully completed its inaugural $2.5 billion bond issuance, which features a primary listing on the LSE and a secondary listing on the Abu Dhabi Securities Exchange (ADX). This dual-tranche bond included five- and ten-year tenors and garnered an oversubscription of over 4.4 times.
For more news on markets, click here.
