Emirates NBD is first bank to issue Dirham-bond following UAE Federal Government’s establishment of yield curve

2 Min | 11 January 2023

Emirates NBD successfully launches a three-year AED 1 billion bond
The three-year bond was priced at a spread of 83 bps over UAE Government Treasuries
The dirham-denominated bond underscores Emirates NBD’s commitment to supporting the UAE Ministry of Finance’s efforts to develop the AED bond market

Dubai, 11 January 2023: Emirates NBD, one of the leading banks in the MENAT region, has announced the successful pricing of its inaugural AED 1billion dirham-denominated bond, the first such issue by a UAE bank. The Group’s bond sale will support the further development of a medium-term bond yield curve and facilitate access to financing for UAE corporations.

The three-year bond saw strong demand with the order book peaking at over 1.65 billion, allowing Emirates NBD to tighten price to a spread of 83 bps over UAE Government Treasuries. Regional investors contributed 72% of the orderbook while international investors accounted for 28%.

The issuance is the first dirham-denominated bond by a bank since the creation of a medium-term yield curve by the Ministry of Finance and reinforces Emirates NBD’s commitment to deepening the local currency bond market. Since May, the Ministry of Finance has issued a total of AED 9 billion in bonds in two, three and five-year tenors. This is the first dirham-denominated bond to be issued by a UAE corporation in over 10 years.

Commenting on the bonds’ issuance, His Excellency Mohamed Bin Hadi Al Hussaini, Minister of State for Financial Affairs, said: “Following the successful launch of the Treasury Bonds Program of the Government of the United Arab Emirates (T-Bonds), which aims to build the UAE 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. Emirates NBD’s dirham-denominated bond issuance is an important milestone in the development of the local currency bond market, and it aligns with the Government’s objectives of strengthening the local financial markets and developing the investment environment, as well as supporting sustainable economic growth. We look forward to seeing more local corporations issuing bonds in local currency.”

Hesham Abdulla Al Qassim, Vice Chairman and Managing Director of Emirates NBD,
said: “We are extremely pleased with the strong demand for our inaugural dirham bond, with a range of UAE investors participating. 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. We are proud to have been advisors on some of the largest transactions in the region, delivering innovative products and services that meet the increasingly sophisticated needs of our clients and global investors. Emirates NBD will continue to play an important role in reinforcing the UAE’s position as the financial center of the region and supporting government initiatives.”

Emirates NBD Capital, HSBC, Industrial and Commercial Bank of China Limited (ICBC) and Mashreq were joint lead managers and joint bookrunners for the bond.

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