Emirates NBD announced a spread of 83 basis points (bps) over UAE government treasuries as the pricing for its inaugural AED1 billion dirham-denominated bond – the first such issue by a UAE bank.
The three-year bond saw strong demand, with the order book peaking at over AED1.65 billion, allowing the bank to tighten the pricing.
Regional investors contributed 72 percent of the order book, while international investors accounted for the remaining 28 percent.
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The Group’s bond sale is expected to support the further development of a medium-term bond yield curve and facilitate access to financing for UAE corporations.
The issuance is the bank’s first dirham-denominated bond since the ministry of finance created a medium-term yield curve.
Since May, the finance ministry has issued a total of AED9 billion in bonds in two, three and five-year tenors.
This is the first dirham-denominated bond to be issued by a UAE corporation in over ten years.
Mohamed Hadi Al Hussaini, Minister of State for Financial Affairs, said Emirates NBD’s dirham-denominated bond issuance is an important milestone in developing the local currency bond market.
“It aligns with the government’s objectives of strengthening the local financial markets, developing the investment environment, and supporting sustainable economic growth,” the minister said.
Al Hussaini said following the successful launch of the treasury bonds programme of the UAE government, which is aimed to build the dirham-denominated yield curve and develop the local debt capital market, it was encouraging to see strong demand by regional and international investors on the first dirham-denominated issuance by a local bank.
“We look forward to seeing more local corporations issuing bonds in local currency,” he said.
Hesham Abdulla Al Qassim, Vice Chairman and Managing Director of Emirates NBD, said: “We are pleased with the strong demand for our inaugural dirham bond, with a range of UAE investors participating.”
He hoped the bond issue would further deepen the local currency bond market and will help UAE corporations seeking to raise capital.
Emirates NBD Capital, HSBC, Industrial and Commercial Bank of China Limited (ICBC) and Mashreq were joint lead managers and joint bookrunners for the bond.
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