Strong Demand for Gulf Debt

Strong Demand for Gulf Debt

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  • The UAE's recent issuance of its first US dollar-denominated sovereign bond in over a year has garnered remarkable demand, with the Ministry of Finance announcing that the $1.5 billion bond received bids totaling more than $7.4 billion. This overwhelming response from a diverse set of investors, including domestic, regional, and international participants, underscores the country's growing appeal to foreign investors.
  • The investor breakdown reveals that 45% were from the Middle East, 21% from the US, 14% from Europe, 11% from Asia, and 9% from the UK. The majority of the allocation, around two-thirds, went to banks and private lenders, with the remaining portion distributed among fund managers, pension funds, central banks, and the insurance sector. This 10-year bond, maturing in September 2033, offers a yield of 4.917%, with a spread of 60 basis points over US Treasuries. It will be listed on both the London Stock Exchange and Nasdaq Dubai.

Why it matters

Mohamed Al Hussaini, the Minister of State for Financial Affairs, emphasized that the successful completion of this sovereign bond issuance reaffirms the UAE's status as an attractive destination for investors and a premier global investment hub. Notably, the UAE had achieved strong results in its previous bond offering in June 2022, raising $3 billion against orders exceeding $15 billion.


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