Finance & Capital Market

Abu Dhabi $5bn multi-tranche bonds listed on ADX

The Abu Dhabi Securities Exchange Sunday started listing of the Emirate of Abu Dhabi Global Medium Term Note Programme total amount of $5 billion in three tranches.

The listing is part of Abu Dhabi’s strategy aimed to optimise the capital structure of the emirate, tapping into diverse funding sources while maintaining the current high credit ratings, reported Emirates news agency Wam.

Underpinned by strong investor appetite, the bonds are priced at historic low yields. The programme comprises three tranches: a $2 billion 3-year tranche at 0.750 percent; a $1.5 billion long 10-year tranche at 1.7 percent, and a $1.5 billion 50-year tranche due in 2070 at 2.700 percent.

As the only AA-rated sovereign issuer by all three rating agencies in the GCC region, Abu Dhabi’s proactive medium-term debt management strategy optimizes the capital structure of the emirate and taps into diverse funding sources, while maintaining the current credit ratings.

The bond issuance was 4.8 times oversubscribed (at peak orderbook), with orders coming from over 60 new accounts and an orderbook which peaked at $24 billion.

The 50-year tranche is the longest term for a bond issued by a GCC sovereign issuer, which underscores Abu Dhabi’s robust credit fundamentals and the investors’ trust in the emirate’s future economic prospects. Its bonds were particularly well received by international investors, who accounted for 95 percent of the final geographical allocation, showcasing trust in Abu Dhabi’s ability to deliver sustained, long-term economic growth.