UAE has high financial solvency, strong credit profile - Sheikh Maktoum

UAE government confirms issuance of multi-tranche bonds

  
Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum Deputy Ruler of Dubai and President of the Dubai International Financial Centre, has issued a directive appointing DIFC Authority’s Board of Directors for a two-year term. Image courtesy Dubai Media Office Twitter handle. Image for illustrative purposes.

Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum Deputy Ruler of Dubai and President of the Dubai International Financial Centre, has issued a directive appointing DIFC Authority’s Board of Directors for a two-year term. Image courtesy Dubai Media Office Twitter handle. Image for illustrative purposes.

The UAE's Minister of Finance, Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, who is also the Deputy Ruler of Dubai and Deputy Prime Minister, said that the UAE continues to enjoy “high financial solvency” as well as strong credit profile. 

The statement comes as the Ministry of Finance confirmed the issuance of a US dollar-denominated multi-tranche bond offering, marking the federal government’s entry into the debt capital markets. The new bond package, comprising of tranches of 10, 20 and 40 years, will be issued for subscription, the Ministry of Finance said on Thursday. 

Commenting on the bond offering, Sheikh Maktoum highlighted the country’s financial stability, as well as its “solid” approach to economic and social growth. 

“Throughout its development, the UAE has adopted a solid and comprehensive approach to economic and social development, which included building a strong credit profile, a solid balance sheet for the Union and a low level of government debt, which enhanced general economic stability,” the Finance minister said. 

“In addition to its efforts to enhance the efficiency and skills of human talent, the country has successfully managed to achieve high financial solvency and reserves as a direct result of its efficient management of economic projects.”

The finance ministry has authorised Abu Dhabi Commercial Bank, BofA Securities, Citigroup Global Markets Limited, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, Morgan Securities, Mashreqbank and Standard Chartered Bank as lead managers and bookrunners to arrange calls with global investors for the bond subscription. 

It said that the public offering is expected to attract high demand from both global and regional investors. 

According to Reuters, the bond deal has so far generated orders reaching $22.5 billion. It was first expected to raise $3 billion to $3.5 billion, but the size of the offering has been increased due to strong demand. 

The new offering is not the first government bond issuance in the UAE. Last June, Abu Dhabi concluded its $2 billion international bond offering. In 2020, Dubai marked its return to the debt markets after six years with the issuance of dual-tranche bonds. 

(Writing by Cleofe Maceda; editing by Seban Scaria) 

Cleofe.maceda@refinitiv.com 

Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here

© ZAWYA 2021


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