Following the UAE Ministry of Finance’s desire to extend the local currency bond market last year, Emirates NBD has become the first bank in the UAE to issue a bond in the dirham currency. The Dubai bank’s three-year bond generated an order book that “peaked at over AED1.65 B,” enabling Emirates NBD to reduce the premium to 83 basis points over UAE Government Treasuries.
International investors made up the remaining 23% of the order book, with regional investors contributing 72%.
As part of its campaign to encourage the issuance of additional local currency debt, the Ministry of Finance has developed a medium-term yield curve. The Ministry of Finance has issued bonds with terms of two, three, and five years totaling AED9 B since May of last year.
“Following the successful launch of the Treasury Bonds Program of the Government of the UAE, which aims to build the dirham-denominated yield curve and develop the local debt capital market, we are pleased to see strong demand by regional and international investors on the first dirham-denominated issuance by a local bank,” said Mohamed Bin Hadi Al Hussaini, Minister of State for Financial Affairs.
The debt issuance by Emirates NBD in UAE dirhams is the first of its kind in more than ten years. “We are extremely pleased with the strong demand for our inaugural dirham bond, with a range of UAE investors participating,” said Hesham Abdulla Al Qassim, Vice-Chairman and Managing Director of Emirates NBD. “This bond issue further deepens the local currency bond market and will help UAE corporations seeking to raise capital.
“The initiative is a testament to our commitment towards supporting the development of dynamic debt and equity capital markets in the UAE.” The bond’s joint lead managers and bookrunners were HSBC, Mashreq, Industrial and Commercial Bank of China (ICBC), and Emirates NBD Capital.
