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05 December 2023

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


Emirates NBD has announced the successful pricing of its inaugural AED1 billion 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 bank's first dirham-denominated bond since the Ministry of Finance created a medium-term yield curve. It reinforces Emirates NBD's commitment to deepening the local currency bond market.

Since May, the Ministry of Finance has issued a total of AED9 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 ten years.

Commenting on the bonds' issuance, Mohamed Hadi Al Hussaini, Minister of State for Financial Affairs, said, "Following the successful launch of the Treasury Bonds Programme of the Government of the UAE (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 developing the local currency bond market. It aligns with the Government's objectives of strengthening the local financial markets, developing the investment environment, and 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."

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