Abu Dhabi issues USD 10 bln. multi-tranche bonds

ABU-DHABI, Demonstrating strong investor confidence in its solid credit fundamentals, the Emirate of Abu Dhabi on September 23, 2019 successfully priced a USD 10 billion multi-tranche international bond offering.

The transaction comprised three tranches: (i) USD 3.0 billion, 2.125 percent, due in 2024, which priced at 65 basis points (bps) over US Treasuries; (ii) USD 3.0 billion, 2.5 percent, due in 2029, which priced at 85 bps over US Treasuries; and (iii) USD 4.0 billion, 3.125 percent, due in 2049, which priced at 110 bps over US Treasuries.

The bonds were well received in the international debt capital markets, with the order book peaking at over USD 25 billion with orders coming from over 650 unique accounts, Emirates News Agency (WAM) reported on Saturday.

Commenting on the offering, Jassem Mohammad Bu Ataba Al-Zaabi – the Chairman of the Department of Finance Abu Dhabi said, “The success of the issuance is a testament of investor confidence in the Government of Emirate of Abu Dhabi’s economic and political stability and the strong credit story.” “We are pleased to witness the achievement of the lowest ever coupons by the Government of Emirate of Abu Dhabi since the debut issuance in 2007.

“The Government of Emirate of Abu Dhabi has managed to achieve the tightest 5-, 10-, and 30-year coupon for a GCC conventional bond. This reflects on the investors’ high confidence in the Emirate’s wise leadership, continuous focused growth strategy as well as its high buffers,” he added.

Investor confidence in the Government of Emirate of Abu Dhabi’s credit story was reflected in the aggregate order book, which reached in excess of USD 25 billion from over 650 unique accounts.

The transaction marks the largest 30-year tranche by the Government of Emirate of Abu Dhabi and achieved the tightest ever spreads by a MENA sovereign across the tenors and lowest coupon on 10 and 30-years Eurobond achieved by a MENA Issuer since the Government of Emirate of Abu Dhabi’s first ever issuance in 2007.

The Government of Emirate of Abu Dhabi remains the tightest priced sovereign from the MENA region, underpinned by this highly successful transaction, which demonstrates the Government of Emirate of Abu Dhabi’s robust credit fundamentals and strong investor confidence.

The final geographical allocation for the bonds stood at 78 percent from international investors, and 22 percent from Middle East investors, according to WAM report.

The final geographic allocation for the five-year bonds was 75 percent international investors (nine percent to Asian investors, 30 percent to European and UK investors, 36 percent to US investors) and 25 percent to investors from the MENA.

The allocation for the 10-year Bonds was 68 percent international investors (nine percent to Asian investors, 36 percent to European and UK investors, 23 percent to US investors) and 32 percent to investors from the MENA.

The allocation for the 30-year Bonds was 91 percent international investors (15 percent to Asian investors, 31 percent European and UK investors, 45 percent to US investors) and nine percent to investors from the MENA.

The final investor type allocation for the five-year bonds was 56 percent to fund managers, 36 percent to banks and corps, one percent to Insurance and Pension Funds, seven percent to others.

The final investor types allocation for the 10-year bonds was 50 percent to fund managers, 42 percent to banks and corps, five percent to others, three percent to Insurance and Pension Funds.

The final investor type allocation for the 30-year bonds was 71 percent to Fund managers, 13 percent to Insurance and Pension Funds, 12 percent to banks and corporates, four percent to others.

BNP Paribas, Citigroup, First Abu Dhabi Bank, HSBC, J.P. Morgan and MUFG were Joint Lead Managers and Joint Book runners, and Abu Dhabi Commercial Bank PJSC and SMBC Nikko were co-lead managers for the offering.

Source: Kuwait News Agency