His Excellency Mohamed bin Hadi Al Hussaini, Minister of State for Financial Affairs. Image courtesy: Ministry of Finance

The Federal Government of the United Arab Emirates, represented by the Ministry of Finance, successfully closed its sale of a USD 1.5 billion 10-year bond expiring in September 2033, with a yield of 4.917% and a spread of 60 basis points over US Treasuries. The bond will be listed on the LSE and the Nasdaq Dubai.

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.

His Excellency Mohamed bin Hadi Al Hussaini, Minister of State for Financial Affairs, said: “The successful completion of another sovereign bond by UAE, is a testament that UAE remains an attractive destination for investors and one of the World’s most attractive investment hubs.”
His Excellency added: “The UAE has yet again achieved strong results in its recent bond offering attracting strong and diversified investors demand. The strong order book resulted in price compression of 25bps from the initial pricing guidance, with final pricing at US Treasuries plus 60 bps.”

The issue was arranged and offered through a syndicate of joint lead managers and bookrunners comprising of Abu Dhabi Commercial Bank PJSC, BNP Paribas, Citigroup Global Markets Limited, Emirates NBD Capital, First Abu Dhabi Bank PJSC, HSBC Bank plc, Goldman Sachs, Mashreq Bank PSC and Mizuho.

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%.

The Notes will be rated AA- by Fitch, and Aa2 by Moody’s, in line with the credit rating of the Federal Government of the United Arab Emirates. UAE’s strong international credit rating reflect the creditworthiness of the UAE which is driven by the high GDP per capita, innovative policies, strong international relationships, and ability to withstand economic and financial challenges.