The Emirate of Abu Dhabi announced the issuance of multi-layer sovereign bonds on the eighth of April, with a total value of seven billion dollars (25.7 billion dirhams), attracting strong interest from international investors.
The issuance is part of Abu Dhabi’s medium-term strategy, which aims to strengthen the emirate’s capital structure, while the strong demand reflects continued investor confidence in the emirate’s established credit standing.
Sovereign bonds were divided into three tranches: a two billion dollar tranche for five years, a two billion dollar tranche for 10 years, and a three billion dollar tranche for 30 years.
The order book exceeded the barrier of $ 45 billion, which is 6.3 times more than the offer size of the issuance from more than 100 new investment accounts, which is a new record for Abu Dhabi.
The bonds for a period of 30 years witnessed a great turnout from international investors, as they formed 98% of the final geographical allocation to this segment, which shows confidence in the ability of Abu Dhabi to achieve sustainable economic growth in the long term.
The bonds were priced at 220, 240, and 271.1 basis points for the term (five years, 10 years, and 30 years in a row) above the rate of return on US Treasury bonds.
The head of the Abu Dhabi Finance Department, Jassem Baataba Al-Zaabi, said: “The great success of the offering reflects the continued confidence of investors in our ability to achieve sustainable economic growth, especially in light of times of uncertainty in the world and declining oil prices.”
He added: "Our solid credit fundamentals and strong credit ratings coupled with a stable outlook have enabled us to attract a diverse group of investors from the capital markets."
The Emirate of Abu Dhabi has a strong balance sheet and a high ability to issue debt securities as part of the Emirate's public debt management process, as a result of decades of careful and balanced financial management.
Abu Dhabi's economy is the only AA rated in the region, which consolidates its credit standing.