KHALEEJ TIMES, Thursday, Oct 21, 2021 | Rabi Al-Awwal 14, 1443
UAE sovereign bonds listed on Nasdaq Dubai
Emirates:
Mohammed bin Hadi Al Hussaini, Minister of State for Financial Affairs,
rang the market-opening bell to celebrate and mark listing the UAE sovereign
bonds on Nasdaq Dubai.
The sovereign bonds package – which is the first of its kind to be issued by the
UAE Government – raised $4 billion, with the Ministry of Finance representing
the UAE government in this issuance.
The bell ringing was attended by Essa Kazim, Governor of the Dubai International
Financial Centre (DIFC) and Chairman of the Dubai Financial Market (DFM); Younis
Haji Al Khoori, Undersecretary of Ministry of Finance; Hamed Ali, CEO of Nasdaq
Dubai and Deputy CEO of the DFM; Saeed Rashid Al Yateem, Assistant Under
Secretary of the Resource and Budget Sector at the Ministry of Finance; Mariam
Al Amiri, Undersecretary, Financial Management Sector; and senior officials from
both parties.
Mohammed bin Hadi Al Hussaini said the UAE has recorded an unprecedented
achievement in issuing these bonds,
which came in accordance with the UAE government’s strategy that has firm
objectives and directives, and prioritises the prosperity of the UAE people.
"This issuance coincides with the adoption of the largest budget in the history
of the UAE, thereby reaffirming the country’s strong and balanced economy. It
also reiterates the confidence of local, regional and international investors in
our country’s ability to achieve sustainable economic growth, especially since
the proceeds of these bonds will be used to provide financing for infrastructure
projects for the federal government in strategic fields. This will help create
long-term value for the sovereign wealth of the UAE government, contribute to
the UAE’s prosperity in the future, and support the country’s progress towards
sustainable economic and social development – which is a key pillar for the next
50 years,” he said.
The US dollar-denominated multi-tranche sovereign bonds are comprised of three
tranches: a 10-year tranche, a 20-year tranche, in addition to a 40-year
dual-listed Formosa tranche. The bonds captured the demand of international and
regional investors. Global books peaked at over $22.5 billion, representing a
5.6 per cent oversubscription. This enabled the Ministry of Finance to issue
bonds that achieved the lowest-ever yield for a debut sovereign from the GCC, as
the returns of the three tranches were priced at two per cent, 2.875 per cent
and 3.250 per cent, respectively.
Essa Kazim, Governor of the Dubai International Financial Centre (DIFC) and
Chairman of the DFM, said: "We congratulate the Ministry of Finance for the
successful issuance and listing of the debut issuances from the UAE Federal
Government. The historic issuances underline the strategic commitment to
reinforce the capital markets’ activities in the country, considering its status
as an international financial hub by developing a government bond market
alongside the already active corporate bond and Sukuk market. They are not only
providing investors with highly-rated investment opportunities and strengthening
the Government’s credit profile but also represent a key driver for a thriving
fixed income market that is vital in financing economic development projects in
the UAE and the broader region. The issuances shall give more momentum to UAE’s
development efforts as our country is showcasing an excellent example in
addressing the global economic challenges and its GDP is poised to grow by 3.1
per cent this year as per the International Monetary Fund (IMF) forecasts.”
Younis Haji Al Khoori said the three tranches achieved the lowest-ever yield for
a debut sovereign from the GCC, another testament to the credit strengths of the
UAE.
"The UAE is the first-ever sovereign to do a US dollar benchmark issuance in the
20-year tenor in the GCC. In addition, the 40-year Formosa tranche achieved the
highest ever distribution into Asia for a long-dated US dollar benchmark
issuance by a sovereign. The issuance of these bonds will contribute to the
development of the bond market and finding investment alternatives for
investors.”
Hamed Ali, CEO of Nasdaq Dubai and Deputy CEO of the DFM, said: “As the
international exchange of the region, Nasdaq Dubai is pleased to welcome the
listing of the UAE federal bonds. This significant step clearly indicates the
deep belief in Nasdaq Dubai’s comprehensive infrastructure that has created a
world-class marketplace to support issuance and listing of fixed income
instruments from sovereign and commercial issuers in the UAE and beyond and
enable them to connect with local, regional and international investors. The
accelerating pace of issuances and listings on Nasdaq Dubai has reinforced its
position as the leading venue for fixed income listings in the Middle East with
a total value of $107 billion.”