The UAE, represented by the Ministry of Finance, has successfully closed its offering of a US dollar-denominated dual-tranche sovereign bond package - comprising medium and long-term tranches: a 10-year tranche and a 30-year Formosa tranche worth a total $3 billion - which saw orders in excess of $15 billion and the size doubled from initial target of $1.5 billion. 

 

These bonds were priced on June 23, and will be settled on July 7 2022, with their tranches distributed as follows:

 

The 10-year tranche bonds size was $1.75 billion, priced at a spread of 100 bps over US Treasuries, with final coupon at 4.050%. This tranche will be listed on both London Stock Exchange (LSE) and Nasdaq Dubai.

 

On the 30-year Formosa tranche, the ministry said its size was $1.25 billion, priced at a spread of 175bps over US Treasuries, with final coupon at 4.951%. It will be listed on London Stock Exchange (LSE), Taipei Exchange and Nasdaq Dubai.

 

Mohamed Bin Hadi Al Hussaini, Minister of State for Financial Affairs, said the successful subscription of the second sovereign bonds was a testament to the confidence of investors in the strong credit and stability of the UAE economy. 

 

"The initial target was a benchmark size of $1.5 billion, with global book orders peaking at $15 billion on an intraday transaction, representing a c. 5x oversubscription; the issuance was upsized to $3 billion," he stated. 

 

"Pricing was tightened by 25bps from the initial pricing guidance on both tranches, with final pricing at UST plus 100 bps for the 10-year tenor and UST plus 175 bps for 30-year tenor," he added.-TradeArabia News Service