UAE debt instruments register $39bn in 2017

UAE debt instruments register $39bn in 2017
The highest bond issue in 2017 was Mubadala’s $1.5 billion issue

By: Bedour Al Raee

Dubai – Mubasher: The UAE’s government and companies increased their debt instrument issues to $39 billion during 2017 from $24.26 billion in the previous year, according to a survey conducted by Mubasher.

In 2017, the UAE-based companies issued bonds and sukuk with a total value of $26.6 billion and $3.26 billion, respectively, the survey found.

Mubadala’s $1.5 billion bonds

Mubadala’s $1.5 billion deal was the highest bond issue in 2017. The amount was divided into two tranches; an $850 million tranche with seven-year maturity, and a 12-year maturity $650 million tranche.

Abu Dhabi’s government announced in October that it had raised $10 billion after the completion of the sale of public bonds.

The total value of sukuk issues is expected to range between $60 billion and $65 billion in 2017 versus $67.4 billion in 2016, Mohamed Damak, the global head of Islamic finance within S&P Global Ratings commented.

Some investors attribute the decline in sukuk issues to the shortage of liquidity at some of the GCC’s banks, Damak stated.

In November 2017, the Abu Dhabi National Oil Company (ADNOC) announced the issuance and closing of a $3 billion bond by Abu Dhabi Crude Oil Pipeline (ADCOP), a fully-owned subsidiary.  

A federal law on public debt, will allow the UAE government to issue public debt instruments on a federal scale, was scheduled to come into effect in the nation by the end of 2017.

 

Translated by: Muhammad Khalid 

Source: Mubasher Exclusive

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