The UAE Ministry of Finance recently concluded the issuance of $1.5 billion in US dollar-denominated sovereign bonds with a 10-year maturity due in July 2034. The bonds were priced with a yield of 4.857%, which represents a margin of 60 basis points over the US Treasury bond yield. These bonds will be listed on the London Stock Exchange and Nasdaq Dubai. The offering attracted significant interest from high-quality investors, both locally and internationally, with orders totaling $6.5 billion, four times the amount issued. This reflects the increasing interest of foreign investors in the UAE and the country’s commitment to becoming a global investment hub.
According to Mohammed bin Hadi Al Hussaini, the Minister of State for Financial Affairs, the successful bond offering reaffirms the UAE’s appeal to investors and its status as a premier investment destination. The significant oversubscription led to a 30 basis point reduction in pricing from the opening, with a final pricing of 60 basis points above the US Treasury bond yield. The offering was managed by several lead managers and bookrunners, further enhancing investor confidence.
The geographic allocation of the 10-year segment of the bond issuance saw 38% going to Middle Eastern investors, 34% to American investors, 18% to UK investors, 7% to European investors, and 3% to Asian investors. Qualitatively, the allocation was distributed as follows: 56% to fund managers, 40% to banks and private banks, 1% to sovereign investment funds and central banks, 1% to the insurance sector and pension funds, and 2% to other sectors. These bonds will be rated AA- by Fitch and Aa2 by Moody’s, reflecting the UAE’s strong creditworthiness and economic fundamentals.
In summary, the successful bond offering underscores the UAE’s attractiveness to global investors and its commitment to maintaining a strong financial standing in the international markets.