Emirates NBD is the first banking institution to offer bonds in UAE dirhams
Emirates NBD, the leading banking group in the Middle East, North Africa and Turkey, announced the successful pricing of its first dirham bond issuance, amounting to one billion dirhams, the first bond of its kind issued by a UAE bank.
The sale of these bonds will support efforts to further develop the yield curve in UAE dirhams, as well as enable the corporate and business sector in the country to issue in UAE dirhams.
The three-year bonds witnessed strong demand, with a peak order book of more than 1.65 billion dirhams, which allowed Emirates NBD to reduce the interest rate to an additional 83 points on the Federal Treasury Bonds.
Regional investors accounted for 72% of the order book, while international investors accounted for 28%.
This bond is the first UAE dirham issuance from a local bank, after the Ministry of Finance developed the yield curve over the medium term, which confirms Emirates NBD's commitment to consolidating the foundations of the local currency bond market.
Since last May, the Ministry of Finance has offered a total of 9 billion dirhams of bonds in three tranches, with maturities of two, three and five years.
Emirates NBD is the first banking institution in the UAE to offer AED bonds in more than 10 years.
Commenting on this issuance, Minister of State for Financial Affairs Mohammed bin Hadi Al Husseini said: “We are pleased to witness strong demand from regional and international investors for the first issuance denominated in UAE dirhams by a local bank, after the successful issuance of government treasury bonds program denominated in the local currency dirham. Which aimed to build the yield curve in UAE dirhams, reduce dependence on foreign capital markets and develop the local debt market.The issuance of bonds denominated in UAE dirhams by Emirates NBD is a milestone in the development of the local currency bond market, in line with the government's goals of Enhancing the local financial market, improving the investment environment, and supporting sustainable economic growth, and we look forward to seeing more of these issuances during the next phase.”
For his part, Hisham Abdullah Al Qassim, Vice Chairman and Managing Director of Emirates NBD Group, said: “We are pleased with the strong demand for our first bond issue in UAE dirhams, with wide participation from regional and international investors.
We are very confident that this step will strengthen the foundations of the UAE dirham bond market, and will also support regional institutions and companies that aspire to finance their businesses and increase their capital.
This initiative is a strong testament to our commitment to support the efforts made to develop a vibrant market for debt instruments and capital in the UAE.”
He added: “We are proud of our pivotal role in providing our advisory services within a number of the largest commercial deals and transactions in the region, because we are always keen to provide a package of the best services and innovative financial solutions that meet the evolving and ever-changing requirements of our clients and international investors. Emirates NBD will continue its prominent role In consolidating the position of the UAE as a vital financial center in the region, as well as supporting government initiatives.
Emirates NBD announced the appointment of Emirates NBD Capital, HSBC Bank, Industrial and Commercial Bank of China Limited and Mashreq Bank to act as underwriting manager and underwriter for the bond issuance.
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