Federal Debt Management Office
International Bonds
UAE International Bonds for Global Investors
International bonds are debt securities issued outside the issuer’s country with the goal of attracting more investors from the international market. Like T-bonds, international bonds involve paying interest at regular intervals and returning the principal amount to investors when the bond reaches maturity.
On 6 October 2021, the Federal Government of the United Arab Emirates priced a USD 4.0bn 144A/RegS multi-tranche bond offering. The transaction marks the UAE’s inaugural foray into the international debt capital markets. The UAE priced a highly successful transaction that met its strategic objectives, both in terms of pricing as well as in terms of size (upsizing from the initial contemplated USD 3bn). Furthermore, the transaction achieved a number of milestones, including:
The first 20-year USD benchmark issuance by a GCC sovereign
Lowest all-in yield achieved by a GCC sovereign on a debut USD offering
The transaction priced flat to the tightest sovereign spreads in the region
October 2021: USD 4.0BN Multi-tranche 144A/RegS Bond Offering
Summary of Terms
Execution Highlights
01
The UAE announced initial price thoughts (‘IPTs”) of ‘T+105bps’, ‘T+135bps’ and ‘3.600% area’ for a 10-year tranche, a 20-year tranche and a 40-year Formosa tranche, respectively, on 6th of October 2022, at Asia open.
02
The orderbook witnessed strong demand from the onset and exceeded USD 20bn by mid-day London, allowing the UAE to tighten pricing by 25bps on each of the 10-year and 20-year tranches and by 30bps on the 40-year Formosa tranche. A resilient orderbook, which grew to USD 22.5bn, allowed the UAE to launch an upsized USD 4bn issuance at ‘T+70bps’, ‘T+105bps’ and ‘3.250%’ for the 10-year, 20-year and 40-year tranches, respectively, which represents a 35bps, 30bps and 35bps respective tightening from IPTs.
03
The orderbook peaked in excess of USD 22.5bn, representing 5.6x oversubscription, from over 200 accounts. The transaction also achieved a well-balanced allocation across investor geographies and types.
04
Strong demand was witnessed from UAE banks, on the shorter tenor in specific, due to the HQLA status of the paper as designated by the UAE Central Bank, solid interest from international accounts, including real-money accounts and central banks, due to the Government’s sturdy credit ratings, fundamentals and EMBI-eligibility, and robust bids from Taiwanese lifers on the 40-year Formosa tranche.
Breakdown by Investor Type
10 Year
20 Year
40 Year Formosa
Breakdown by Investor Geography
10 Year
20 Year
40 Year Formosa
June 2022: USD 3.0BN Dual-tranche 144A/RegS Bond Offering
Summary of Terms
Breakdown by Investor Type
USD 10 Year
USD 30-year (Formosa)
Breakdown by Investor Geography
USD 10-year
USD 30-year (Formosa)
September 2023: USD1.5BN 144A/RegS Bond Offering
Summary of Terms
