Emirates Development Bank lists $750m bond on Nasdaq Dubai

The bond issuance was 4-times oversubscribed, attracting interest from around the world

Hundreds of SMEs in the region are expected to benefit due to the new partnership between EDB and Beehive. Courtesy EDB

Emirates Development Bank, the state-owned lender tasked with helping to develop the UAE's industrial sector, listed a $750 million bond on Nasdaq Dubai.

The five-year issuance attracted strong interest from global investors at a yield of 1.639 per cent. It was 4-times oversubscribed, with 34 per cent of orders coming from Mena investors, 36 per cent from Europe, 28 per cent from Asia and 2 per cent from the US offshore market, according to a statement from the exchange.

"This bond issue enhances our financing capabilities and progress towards implementing the bank’s new strategy, which aims to support the country’s economic diversification plans, empowering individuals, small and medium-sized enterprises, and large corporates in priority industrial sectors,” Dr Sultan Al Jaber, minister of industry and advanced technology and chairman of EDB, said in an earlier statement.

EDB, which was founded in 2011 through the merger of Emirates Industrial Bank and the Emirates Real Estate Bank, is set to play an integral role in advancing the UAE's industrial strategy through Operation 300bn – an initiative unveiled by the government in March to raise the industrial sector's contribution to gross domestic product to Dh300 billion by 2031, from Dh133bn currently.

The lender aims to provide Dh30bn ($8.17bn) in financing over the next five years to support the UAE’s efforts to strengthen its industrial sector.

It plans to fund industries such as health care, infrastructure, food security and technology and help to create 25,000 jobs during the period. The strategy is expected to create 13,500 new companies in the industrial sector and aims to raise industrial research and development spending from 1.3 per cent to 2 per cent of GDP by 2031.

“The $750 million bond issue is an endorsement of EDB’s long-term prospects and reflects our strong credit profile and new strategic roadmap. This transaction helps us mobilise capital to accelerate our long-term goals of supporting the UAE’s economic diversification plans,” said Ahmed Al Naqbi, chief executive of EDB.

The listing of EDB's bond also reinforces Dubai’s position as the largest listing venue in the Middle East for US dollar-denominated debt, with a total value of $96.876bn, Nasdaq Dubai said.

Listings of bonds by banks on Nasdaq Dubai have increased in recent months. Emirates NBD, Dubai's biggest lender by assets, listed a $750m bond this month, following an earlier issue for the same amount in January. The Islamic Development Bank also listed its first sustainability sukuk, a $2.5bn Islamic bond, on the exchange in April. Dubai Islamic Bank also issued a $500m sukuk on the exchange in the same month.