Emirates NBD announced the successful pricing of its first bond issue in dirhams, amounting to one billion dirhams, which is the first bond of its kind issued by an Emirati bank. The sale of these bonds will support efforts to further develop the yield curve in dirhams, as well as enable the corporate and business sector in the United Arab Emirates to issue in dirhams.
The three-year bonds witnessed strong demand, with a peak order book of more than AED 1.65 billion, which allowed Emirates NBD to reduce the interest rate by an additional 83 basis points on the Federal Treasury Notes. Regional investors accounted for 72% of the book of subscription orders, while the share of international investors amounted to 28%, according to a bank statement, which Namazon received its copy today, Wednesday.
These bonds are the first dirham issuance from a local bank, after the Ministry of Finance developed the yield curve in the medium term, which confirms Emirates NBD's commitment to consolidating the foundations of the local currency bond market.
Since last May, the Ministry of Finance has offered a total of 9 billion dirhams of bonds in three tranches, with maturities of two, three and five years. Emirates NBD is the first banking institution in the United Arab Emirates to offer bonds in dirhams in more than 10 years.
Commenting on this issuance, Mohammed bin Hadi Al-Hussaini, Minister of State for Financial Affairs, said: We are pleased to witness strong demand by regional and international investors for the first UAE dirham-denominated issuance by a local bank, after the successful issuance of the government treasury bonds program denominated in the local currency dirham. Which aimed at building the yield curve in dirhams, reducing dependence on foreign capital markets and developing the domestic debt market. The issuance of dirham-denominated bonds by Emirates NBD is a milestone in the development of the local currency bond market, in line with the government's objectives of strengthening the local financial market, improving the investment environment, and supporting sustainable economic growth. We look forward to seeing more of these releases in the coming period.
For his part, Hisham Abdullah Al Qassim, Vice Chairman and Managing Director of Emirates NBD Group, said: We are pleased with the strong demand for our first issue of bonds in dirhams, with wide participation from regional and international investors. We are very confident that this step will strengthen the foundations of the UAE dirham bond market, and will also support regional institutions and companies that aspire to finance their businesses and increase their capital. This initiative is a strong testament to our commitment to support the efforts exerted in developing a vibrant market for debt instruments and capital in the United Arab Emirates. We are proud of our pivotal role in providing our advisory services within a number of the largest commercial deals and transactions in the region, because we are always keen to provide a package of the best services and innovative financial solutions that meet the ever-evolving and ever-changing requirements of our clients and international investors. Emirates NBD will continue its prominent role in consolidating the UAE's position as a vital financial center in the region, as well as supporting government initiatives.
Emirates NBD announced the appointment of Emirates NBD Capital, HSBC Bank, Industrial and Commercial Bank of China Limited and Mashreq Bank to act as underwriting manager and underwriter for the bond issuance.
