Sovereign issue for 50 years ... the longest term in the Arab Gulf region
Abu Dhabi issues multi-segment bonds worth $ 5 billion
The Emirate of Abu Dhabi announced yesterday that it has successfully completed the issuance of multi-segment sovereign bonds valued at $ 5 billion, reflecting its continued commitment to enhancing financial sustainability.
And relying on the high demand shown by the investors, the bonds were priced at historically low returns.
The issuance consists of three segments: a $ 2 billion tranche for three years, a long-term tranche worth $ 1.5 billion for 10 years, and a $ 1.5 billion tranche for 50 years.
The 50-year tranche is the longest-term bond issued by a sovereign authority in the Gulf Cooperation Council states, which confirms Abu Dhabi's distinguished credit standing and the high confidence of investors regarding the promising future prospects of the emirate's economy.
As the only entity in the Gulf Cooperation Council countries that received a sovereign credit rating (AA) from the three credit rating agencies, Abu Dhabi's proactive medium-term debt management strategy is based on strengthening the emirate's capital structure and making use of diversified funding sources, while preserving credit ratings. Current.
Requests for bond subscription exceeded 4.8 times the required volume, as it received requests from 60 new entities, and the volume of requests reached $ 24 billion.
The 50-year bonds also enjoyed great demand from international investors, who accounted for 95% of the total available bonds in this segment.
"The success of this issuance, which comes in light of the global (Covid-19) crisis, confirms Abu Dhabi's distinguished credit standing and the strength of the emirate's economy," said the head of the Department of Finance in Abu Dhabi, Jassim Mohammed Buabta Al Zaabi.
He added, "The 50-year segment is the first of its kind, not only for Abu Dhabi, but at the level of the Gulf Cooperation Council countries. It also represents a reflection of the great investor confidence in our economy, credit strength and positive long-term outlooks."
He continued: “Abu Dhabi demonstrated a high degree of resilience during this period, as the global economy witnessed many challenges.
As the UAE prepares for the next fifty years through its initiative (2020 ... the year of preparation for fifty), we affirm our commitment to support the national strategy for wise leadership by instilling a culture of financial sustainability.
The yields of sovereign bonds will allow Abu Dhabi to focus on the sustainable growth of non-oil sectors, while the emirate continues to diversify its sources of financing, optimize the use of government resources, and support continuous and sustainable growth.
The tranches achieved unprecedented pricing levels of 0.83% for three-year bonds, 1.732% for 10-year bonds, and 2.7% for 50-year bonds.
Citi, Deutsche Bank, First Abu Dhabi Bank, Morgan Stanley and Standard Chartered worked as underwriting managers and joint collectors.
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