Abu Dhabi ADX lists $5bn tranche bond

By Rahul Vaimal, Associate Editor
  • Follow author on
Abu Dhabi ADX
Representational Image

Abu Dhabi-based regional stock exchange, Abu Dhabi Securities Exchange (ADX) has begun listing Abu Dhabi Global Medium Term Note Programme worth $5 billion in three tranches.

The listing was announced as part of Abu Dhabi’s mission to enhance the capital structure of Emirates and to experiment with different funding methods while maintaining its present credit ratings.

The program has three trenches, a $2 billion three year trench at 0.750 percent, a $1.5 billion ten years long trench at 1.7 percent and a $1.5 billion fifty year-long trenches which will be due in 2070 at 2.700 percent. The bonds are priced at very low yields considering the strong investor support.

Being the only AA-rated sovereign issuer by the rating agencies in the GCC the Abu Dhabi proactive medium term-debt management strategy is to optimize the capital structure of the emirates and allows it to focus on the expansion of the non-hydrocarbon sector of the country.

The bond issuance was 4.8 times oversubscribed, there were orders from 60 new accounts and the order book was closed with $24 billion.

Jassem Mohammed Buatabh Al Zaabi
Jassem Al Zaabi, Chairman
Abu Dhabi Fin. Dept

“The 50-year trench is a first not for just Abu Dhabi but also the GCC, and a reflection of formidable investor confidence in our economy, credit strength and long-term outlook.”

Abu Dhabi’s bonds were highly accepted by the international investors as they considered 95 percent of the final geographical allocation, showing their confidence over the country’s ability to give a stable and long term economic growth.

The First Abu Dhabi Bank, Citi, Deutsche, Morgan Stanley and Standard Chartered were the Joint Lead Managers in the bond issuance.