UAE selling two-tranche dollar bonds with Formosa portion

UAE selling two-tranche dollar bonds with Formosa portion

Each tranche is expected to be of benchmark size, which generally means at least $500 million

The bonds, for which demand topped $12 billion, will offer investors 100 basis points over US Treasuries (UST) for the 10-year paper and 175bps over UST for the Formosa notes. — File photo

By Reuters Published: Thu 23 Jun 2022, 6:03 PM Last updated: Thu 23 Jun 2022, 6:07 PM

The UAE was set to raise $2.5 billion with a two-tranche US dollar-denominated bond sale comprising a 10-year tranche and 30-year Formosa portion, a bank document showed on Thursday.

The bonds, for which demand topped $12 billion, will offer investors 100 basis points over US Treasuries (UST) for the 10-year paper and 175bps over UST for the Formosa notes, according to the document from one of the banks on the deal, expected to price later on Thursday.

The debt sale will be used for “budgetary purposes in compliance with the Public Debt Strategy and/or for the purpose of investment by the EIA pursuant to the Public Debt Strategy,” another bank document said, referring to the UAE’s federal sovereign wealth fund.

An investor presentation viewed by Reuters showed the UAE expects Dh56.7 billion in revenues in its Dh58.9 billion budget for