Abu Dhabi sovereign wealth fund ADQ priced a dual-tranche USD 2 bn bond at a spread tightened 30 points from initial guidance, drawing in USD 7 bn in orders, according to a press release.

The bonds were priced at among the lowest yields for non-sukuk bonds in the GCC so far this year, with the USD 1 bn five-year tranche priced at a spread of 85 basis points over US Treasuries, the lowest for a five-year tranche in the region so far, and the USD 1 bn ten-year tranche priced at 95 basis points, which is the second-lowest. Spreads for both tranches were tightened by 30 basis points from initial guidance.

Background: The five-year tranche is priced with a 4.5% coupon, while the 10-year tranche carries a coupon rate of 5% per annum. The notes will be listed on the London Stock Exchange.

Who’s buying? Investor interest was broad-based, with participation from Asia, the US, the Middle East, the UK, and Europe. The transaction marked ADQ’s widest distribution to Asian investors so far.

Where the money’s going: ADQ will use the proceeds for general growth capital and to keep powering its long-term plan.

REMEMBER- This is ADQ’s third time tapping international debt markets since it launched its Global Medium Term Note Program, which aims to diversify its funding sources for future acquisitions. Its debut USD 2.5 bn issuance in May 2024 pulled in USD 11 bn in orders (4.4x oversubscribed), followed by a USD 2 bn offering in September 2024 that saw USD 8 bn in bids (4.1x).

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