Abu Dhabi has issued USD 3 bn in USD-denominated bonds in a dual-tranche offering that saw strong international investor interest, according to the Abu Dhabi Media Office. The issuance saw USD 18.5 bn in orders and was more than five times oversubscribed.

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At a record spread: The first tranche of USD 1 bn notes carries a three-year maturity date representing a 10 bps spread over comparable US Treasuries, while the second USD 2 bn tranche will mature after 10 years and has a 18 bsp spread over 10-year US Treasuries. The spread is about 94% below the average risk premium for emerging markets, Bloomberg reports.

Demand was driven by local and Asian investors, the business news information service adds, which prompted the “tightest-ever 10-year tranche in all of emerging markets,” fixed income portfolio manager at Arqaam Capital Fady Gendy said.

Solid ratings also help: The emirate holds an AA long-term foreign-currency rating with a stable outlook from both Fitch and S&P.

ADVISORS- Abu Dhabi Commercial Bank, Emirates NBD Capital, First Abu Dhabi Bank, Bank of China, Citi, Goldman Sachs International, HSBC, ICBC, JP Morgan, Morgan Stanley, SMBC, and Standard Chartered Bank acted as joint lead managers and joint bookrunners.

REMEMBER- This is Abu Dhabi’s first return to debt markets in over a year. Abu Dhabi last tapped into debt markets in April 2024 when the emirate raised USD 5 bn through a three-trance eurobond offering.

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