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Abu Dhabi Securities Exchange starts $7 bn bond listing

Abu Dhabi Securities Exchange bond
Currently, the GCC's debt markets are demonstrating more resilience compared to other asset classes

The Abu Dhabi Securities Exchange (ADX) has started listing the multi-tranche $7 billion bond from the Abu Dhabi government, media reports said. In fact, the listing has come at a good time because the GCC’s debt markets are becoming more resilient compared to other asset classes.

It is reported that the issuance was oversubscribed to more than six times. Also, orders were received in excess of $45 billion from 100 new accounts, media reports said. It appears that the bond was highly popular among international investors and it carries a 30-year duration. These investors account for 98 percent of the tranche’s final geographical allocation, media reports said.

It demonstrates investor trust in ADX. The bonds are part of Abu Dhabi government’s strategy to enhance capital structure on the back of maintaining credit returns and exploring various funding sources.

The emirate has joined its Middle Eastern peers in selling foreign bonds. Angad Rajpal,  head of fixed income at Emirates NBD Asset Management in Dubai, told the media, “Qatar and Abu Dhabi were obvious candidates to open the floodgates. Given expectations for a slow recovery in the second half of the year, these issuers have probably established that this is the most conducive window to issue in.”

Abu Dhabi received AA by S&P Global ratings and it appeared to a level higher than Qatar. Last October, Abu Dhabi issued a $10 billion multi-tranche bond and it received a similar response from international investors. This points to investor confidence in emirate’s bonds issuance, media reports said.

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