UAE issues USD1.5B 10-year bond amid robust worldwide demand
Date
6/26/2024 6:10:58 AM
(MENAFN) The United Arab Emirates (UAE) successfully issued 10-year international bonds worth USD1.5 billion, marking its first sale since last September. This issuance saw substantial demand from global investors, citing an informed source. Initially, the UAE Ministry of Finance set the indicative price for the offering at approximately 90 basis points above comparable US Treasury bonds. However, due to the overwhelming demand, which exceeded USD5.75 billion, the price was adjusted down to 60 basis points.
The UAE boasts one of the highest credit ratings globally, with Moody's assigning it an "Aa2" rating, on par with the United Kingdom and South Korea. This issuance represents the UAE government's fourth federal-level issuance of dollar-denominated bonds. In a similar move, Abu Dhabi, the UAE capital, sold bonds worth USD5 billion last April. The yield for the 10-year bonds in that deal was set at 5.04 percent, a premium of 45 basis points over US Treasury bonds, though they are currently trading at around 4.8 percent.
Despite the UAE's substantial financial resources, bolstered by high revenues from oil and natural gas, the nation continues to engage in bond issuances. These efforts are not driven by a need to raise funds but rather aim to enhance market liquidity by offering debt instruments with varied terms. The UAE is one of the wealthiest countries in the world, managing sovereign funds exceeding a trillion dollars, underscoring its robust financial health and strategic economic planning.
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