Emirates NBD has become the first UAE bank to issue a dirham-denominated bond. The move follows the initiative of UAE Ministry of Finance to expand the local currency bond market last year.
The three-year bond from the Dubai bank has raised an order book ‘peaking at over Dh1.65 billion’, allowing Emirates NBD to tighten price to a spread of 83 bps over UAE Government Treasuries. Regional investors contributed 72 per cent of the order book, with international investors accounting for the rest.
The Ministry of Finance had created a medium-term yield curve as part of its push for more local currency debt issues. Since May last, the Ministry of Finance issued Dh9 billion in bonds in two-, three- and five-year tenors.
“Following the successful launch of the Treasury Bonds Program of the Government of the UAE, which aims to build the dirham-denominated yield curve and develop the local debt capital market, we are pleased to see strong demand by regional and international investors on the first dirham-denominated issuance by a local bank,” said Mohamed Bin Hadi Al Hussaini, Minister of State for Financial Affairs.
The Emirates NBD dirham-denominated debt issue is the first such by a UAE-based corporation in over 10 years. “We are extremely pleased with the strong demand for our inaugural dirham bond, with a range of UAE investors participating,” said Hesham Abdulla Al Qassim, Vice-Chairman and Managing Director of Emirates NBD. “This bond issue further deepens the local currency bond market and will help UAE corporations seeking to raise capital.
“The initiative is a testament to our commitment towards supporting the development of dynamic debt and equity capital markets in the UAE.”
Emirates NBD Capital, HSBC, Industrial and Commercial Bank of China (ICBC) and Mashreq were joint lead managers and joint bookrunners for the bond.