Abu Dhabi says the strong investor demand for its US$3 billion (Dh11bn) bond issue is testimony to its solid economic fundamentals and will help the emirate diversify its funding needs in the future. "We have seen significant demand for the issue with a total order book of US$11.8bn ... a testament of international and regional investors recognition of Abu Dhabi's strong economic fundamentals," said Hamad al Suwaidi, undersecretary at the Department of Finance in Abu Dhabi. He added that despite the change in market conditions, the Emirate had been able to secure the same conditions as for its $1bn (Dh3.68bn) bond issued in July 2007.
The bond, which is part of a $10bn programme, was priced last night after being marketed to US and European investors. Issued in some of the tightest credit conditions in decades, the bond is seen as a proof that international investors are willing to lend money to highly rated governments in the region. Mr al Suwaidi said that 72 per cent of the five-year notes and 90 per cent of the ten-year notes went to international investors. The bond was split in two tranches of $1.5bn each.
The undersecretary said the financing would be used to support the emirate's 2030 Economic Vision, which foresees a tripling of its population. Mr al Suwaidi said the bond would allow the oil-rich emirate, which owns the world's largest sovereign wealth fund, "more flexibility in accessing the international capital markets and help us achieve a more efficient funding structure adding debt to our mix of finance".
uharnischfeger@thenational.ae