The UAE announces the launch of a multi-tranche sovereign bond package for subscription

The government of the United Arab Emirates, represented by the Ministry of Finance, announced its intention to offer a package of multi-tranche sovereign bonds denominated in US dollars.

The UAE Ministry of Finance said, in a statement, today, Thursday, that the new bond package, to be offered for subscription, will include traditional medium and long-term tranches of 10 and 20 years, in addition to a tranche of dual-listed Formosa bonds for a period of 40 years.

A document seen by “Reuters”, on Wednesday, stated that the UAE federal government sold the first bonds in three tranches, worth $4 billion, after receiving requests for more than $17 billion.

For his part, the Deputy Ruler of Dubai, Deputy Prime Minister and Minister of Finance, Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, said: “The UAE has relied on a solid and comprehensive approach to economic and social development, which included building a strong credit profile and a solid balance sheet for the Federation. And a low level of government debt, which enhanced general economic stability. In addition to its efforts to enhance the efficiency and skills of human cadres, the state was successfully able to achieve solvency and high financial reserves as a direct result of its efficient management of economic projects.

The Ministry of Finance authorized Abu Dhabi Commercial Bank, Bank of America Securities, Citigroup Global Markets, Emirates NBD Capital, First Abu Dhabi Bank, HSBC and JPMorgan ”, Mashreq Bank, and Standard Chartered to take over as lead managers and offer managers, with the aim of assuming responsibility for arranging subscription sessions with international investors.

It is expected that the subscription to the UAE sovereign bonds, which will be offered in accordance with the provisions of Rule 144-A of the Securities Act issued in the United States of America, will witness a great demand from international and regional investors, thanks to the high credit standing and confidence that the country enjoys in global markets. The UAE enjoys a sovereign credit rating of AA – by the international agency “Fitch”, and a rating of “Aa2” in creditworthiness, which is the strongest sovereign rating in the region, by the international rating agency “Moody’s”, with the country receiving a stable outlook from both agencies.

It is noteworthy that Federal Decree Law No. (9) of 2018 regarding public debt enabled the federal government to issue sovereign bonds, and help the banking sector to meet international liquidity rules as soon as they were issued, thus supporting the role of the UAE Central Bank in managing liquidity in the banking sector.

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