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UAE’s Masdar raises USD 1 bn in its second green bond issuance

by enterpriseam adminSaudi Edition
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UAE state-owned renewable energy developer Masdar has raised USD 1 bn in its second green bond issuance: The issuance consisted of two tranches worth USD 500 mn each, with five- and 10-year tenors, carrying yields of 4.875% and 5.25%, according to a press release(pdf). The energy giant raised USD 750 mn last year in its debut green bond sale, which it listed on both the London Stock Exchange and the ADX.

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We knew this was in the works: Masdar said in April that it was planning to take a green bond issuance worth between USD 750 mn and 1 bn to market this year to secure funding for its renewable projects in Central Asia, specifically in Uzbekistan and Azerbaijan. This comes as part of a USD 3 bn bonds program aimed at funding clean energy initiatives in the UAE and globally.

The issuance saw strong demand, booking USD 4.6 bn in orders with a 4.6x oversubscription. Some 70% of the allocation went to international investors with the balance going to MENA investors.

ADVISORS: Our friends at HSBC, along with Abu Dhabi Commercial Bank, Citigroup, Credit Agricole, First Abu Dhabi Bank (FAB), Mitsubishi UFJ Financial Group, Natixis, and Standard Chartered Bank acted as joint lead managers and bookrunners.

BACKGROUND- The regional sustainable debt market has been on a tear this year: UAE’s Sharjah government issued EUR 500 mn in sustainability bonds, while Kuwait’s Warba Bank issued USD 500 mn green sukuk, and Qatar’s USD 2.5 green bond attracted USD 14 bn in orders. Al Rajhi also raised USD 1 bn from a 5-year sustainable sukuk sale in March. Meanwhile, Qatar’s QIIB listed USD 500 mn sustainable sukuk issuance on the London Stock Exchange in January, and the UAE sovereign fund Mubadala listed USD 4.5 bn and AED 750 mn green bonds on the ADX.

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