$10B Abu Dhabi bond sale reflects strong investor confidence
dubai— Abu Dhabi government, which has one of the highest investment grades in the Middle East, said on Tuesday that the sale of its $10 billion multi-tranche international bond offering demonstrated strong investor confidence in its solid credit fundamentals.
Abu Dhabi’s Department of Finance said the transaction comprised three tranches: $3 billion of five-year notes, $4 billion of the 10-year tranche and $3 billion of the 30-year offering.
Strong demand from foreign investors represented 78 per cent of the order book. Five-year notes were priced at 65 basis points over US Treasuries; 10-year tranche at 85 basis points; and 30-year bonds at 130 basis points.
“The bonds were well received in the international debt capital markets, with the orderbook closing in excess of $30 billion, representing a three times oversubscription, from approximately 500 orders, the Department of Finance said.
Riyad Abdulrahman Al Mubarak, chairman of the Department of Finance Abu Dhabi, said the strong reception of the offering in the international debt capital markets is a clear testament to Abu Dhabi’s solid and strong credit story.
“We are pleased to witness investors’ high confidence in the Emirate’s fundamentals — namely, our wise leadership, focused growth strategy and high buffers. These strengths have collectively created a diverse, robust and sustainable economy,” said Al Mubarak.
He said the bond sale marked another milestone in Abu Dhabi’s debt capital markets journey. “As we look ahead, we will continue to prudently manage our indebtedness levels, which are currently one of the lowest globally.”
The bond sale, Abu Dhabi’s the first since the $5 billion offering in April 2016, its first in seven years, takes bond deals from the Middle East and North Africa to a record $89 billion this year, according to available data. GCC states, which includes the biggest Arab economy of Saudi Arabia, are selling debt as regional governments seek to bridge budget deficits brought on by low oil prices. The kingdom last week raised $12.5 billion in its second dollar bond offering this year.
The final geographical allocation for the bonds stood at 78 per cent from foreign investors, and 22 per cent from Middle East investors.”