Abu Dhabi's $5 billion bonds 4.8 times over-subscribed
Bonds represent three tranches of differing maturity periods
There has been strong investor backing for Abu Dhabi’s $5 billion in dollar-denominated bonds with three maturity periods.
These included a $1.75 billion tranche maturing in 5 years with a coupon rate of 4.875 per cent; a $1.5 billion tranche maturing in 10 years with a coupon rate of 5 per cent; and a $1.75 billion tranche maturing in 30 years with coupon at 5.5 per cent.
“The rates represent a 35-basis point spread over 5-year US Treasuries, a 45-basis point spread over 10-year Treasuries, and a 90-basis point spread over 30-year Treasuries,” said a statement.
The issuance was 4.8 times oversubscribed and the ‘pricing landed meaningfully inside fair value’.
“The spread achieved by Abu Dhabi represents the tightest spread ever achieved by the emirate and the tightest spread ever achieved by any issuer in the CEEMEA region for 5-, 10-, and 30-year issuances,” the statement added.
The rating agencies S&P’s and Fitch had assigned 'AA' to the bonds.
“The investor appetite and the lowest spreads ever achieved by an issuer in the CEEMEA region, stand testament to global investor confidence in Abu Dhabi’s financial stability as well as its positive long-term economic outlook,” said Jassem Mohammed Bu Ataba Al Zaabi, Chairman of the Department of Finance – Abu Dhabi.
“This successful issuance was backed by strong demand from global investors, and is in line with our long-term approach and philosophy for conservative and optimal debt management, under our AA credit ratings.”