Emirates Development Bank (EDB), a development bank fully owned by the UAE government, has successfully closed a $750 million senior bond.

 

Rated AA- by Fitch, the EDB said the debut bond issue, which has a five-year tenure, was launched at 3.516 per cent coupon in the Regulation S markets. 

 

The inaugural US dollar transaction was issued under EDB’s newly established $3-billion Euro Medium Term Note (EMTN) programme, to provide the bank accessibility to capital markets and further strengthen its funding profile. 

 

EDB is the first federal entity to access the international capital markets under the UAE’s recently announced federal debt framework.

 

The success of the transaction came on the back of an extensive marketing strategy aimed at introducing EDB to international and regional investors, said a statement from the Emirati bank. 

 

The management team, met with institutional investors in Abu Dhabi, Dubai, London, Hong Kong, Singapore, Kuala Lumpur and Taipei, it stated.

 

They showed a strong appetite for EDB's credit offering, resulting in the order book reaching $3.5 billion (close to 4.7 times oversubscription), with demand from over 130 investors. 

 

The investor base was diverse with 36 per cent representing the Middle East, 22 per cent from European markets, and 42 per cent representing Asian markets.

 

Obaid Humaid Al Tayer, Minister of State for Financial Affairs and Chairman of EDB Board, said: "The bank is a key player in the UAE’s financial sector, through its introduction of specialised services to grow the nation’s economy. We are pleased with the strong investor demand and the results of the transaction - highlighting the market’s strong endorsement of EDB’s credit profile."

 

"This deal establishes a tightly priced and liquid benchmark for EDB, and formed an important objective as the first federal entity to issue bonds from the UAE," he noted.

 

Emirates NBD Capital acted as sole financial advisor and a Joint Global Coordinator on the transaction. Standard Chartered Bank also acted as Joint Global Coordinators. Whereas, Emirates NBD Capital, Industrial and Commercial Bank of China Limited, Dubai (DIFC) Branch, Standard Chartered Bank and Union National Bank acted as Joint Lead Managers on the transaction

 

Emirates NBD Capital CEO Fahad Al Qassim said: "As the sole financial advisor and global co-ordinator, Emirates NBD Capital is delighted to have supported the debut $750 million, five-year bond issuance for Emirates Development Bank."

 

"This represents the first debt capital markets issuance by a UAE Federal Issuer. The successful completion of the transaction is a testament to EDB’s strength and its strategic importance to the UAE," he added.

 

Standard Chartered Bank (UAE) CEO Rola Abu Manneh said: "Standard Chartered Bank is delighted to have had the opportunity to partner with Emirates Development Bank on this landmark transaction."

 

The strong investor response to the deal is a testament to Emirates Development Bank’s unique credit story, track record of management and the integral role that Emirates Development Bank plays in the UAE’s financial market," she added.-TradeArabia News Service