Abu Dhabi secured strong investor demand for its dual-tranche bond issuance, tightening spreads significantly from initial price thoughts as the orderbook built momentum.
Tight Pricing on Five- and Ten-Year Tranches
The five-year bond priced with a 3.75 percent coupon at a reoffer price of 99.824 percent. Consequently, the spread tightened to plus 20 basis points over US Treasuries from initial price thoughts in the plus 50 basis points area. The yield on the shorter tenor was set at 3.789 percent.
Meanwhile, the 10-year tranche carried a 4.25 percent coupon at a reoffer price of 99.814 percent. As a result, the spread compressed to plus 25 basis points from IPTs in the plus 55 basis points area. The yield on the longer-dated bond was fixed at 4.73 percent.
The combined orderbook exceeded $11 billion at its peak. However, it settled at $4.3 billion for the five-year bond and $5.6 billion for the 10-year tranche at launch, excluding joint lead manager interest.
Broad Bank Participation and Expected Ratings
JPMorgan Chase acted as billing and delivery bank for the five-year bond, while Standard Chartered handled the 10-year issuance. In addition, a syndicate of regional and international banks served as joint lead managers and joint bookrunners, reflecting broad institutional backing.
The transaction carries an expected rating of AA from S&P Global Ratings and Fitch Ratings, aligning with the sovereign’s rating profile. Therefore, pricing benefited from Abu Dhabi’s strong credit fundamentals and investor confidence in its fiscal position.
The senior unsecured Regulation S Category 1 bonds will list on the London Stock Exchange and the Abu Dhabi Securities Exchange. Moreover, the issuance forms part of the sovereign’s Global Medium Term Note Programme.
Regional Context
Abu Dhabi becomes one of the latest GCC sovereigns to tap debt markets in 2026. Earlier this year, Saudi Arabia launched a $11.5 billion bond sale in January, setting the tone for regional issuance.
The emirate last accessed markets in September, raising $3 billion across two maturities. That transaction included a three-year $1 billion tranche priced at 3.625 percent and a 10-year $2 billion tranche at 4.25 percent. As such, the latest deal reinforces Abu Dhabi’s active funding strategy amid favourable market conditions.
