The overwhelming investor demand for UAE Government’s debut bonds reaffirms the UAE’s strong credit rating, and its ability to overcome all crises, in particular, the repercussions of the Covid-19 pandemic, the Ministry of Finance said.
Younis Haji Al Khoori, the undersecretary of the Ministry of Finance, said the three bond tranches raised $4 billion, while global books peaked at $22.5 billion, representing a 5.6 times oversubscription. “The order-book momentum increased the deal size to $4 billion from the initial target of $3 billion.”
During a virtual media briefing held by the Ministry of Finance, Al Khoori said the bonds would contribute to the development of the bond market and find investment alternatives for investors.
“The high demand of investors for these bonds reaffirms the UAE’s strong credit rating, and its ability to overcome all crises, foremost of which is the repercussions of the Covid-19 pandemic,” he said.
The International Monetary Fund forecasts the UAE’s economy to grow by 3.1 per cent in 2021, and the Central Bank of the UAE estimates a 4.2 per cent growth in 2022.”
The dollar-denominated multi-tranche sovereign bond package, comprised of medium and long-term tranches, including a 10-year tranche, a 20-year tranche, in addition to a 40-year dual-listed Formosa tranche.
Younis Al Khoori said the UAE federal government will be in the market next year for more dollar bond issuances and is working on plans to issue local currency debt.
Individual emirates will remain free to issue debt according to their own needs and priorities, he said. Local currency bonds will be issued “in due time” and no specific date has yet been set for the next dollar issuance, Khoori said.
“The issuance that started this year; we will be continuing the same net year. Then the dirham denominated will follow as the plan and strategy is agreed with the central bank,” said Khoori, adding that the readiness of the market would also be assessed.
(Except for the headline, this story has not been edited by The Finance World staff and is published from a syndicated feed.)
