Abu Dhabi's ADQ raises $2bn from second bond issuance this year

The dual-tranche issuance was oversubscribed by 4.1 times

ADQ has shareholdings in more than 25 portfolio companies which cover key sectors of the Abu Dhabi economy. Shutterstock

Abu Dhabi-based investment and holding company ADQ raised $2 billion from a dual-tranche bond that will be listed on the London Stock Exchange, marking its second issuance this year as it seeks to diversify its funding sources.

The issuance was oversubscribed by 4.1 times, attracting investors from across the US, Europe, the Middle East and Asia, “reflecting ADQ’s strong credit profile and the financial resilience of Abu Dhabi’s economy”, Abu Dhabi Media Office said on Thursday.

The dual-tranche offering includes a $1 billion seven-year bond due in 2031 and a $1 billion 30-year bond due in 2054, with annual coupon rates of 4.375 per cent and 5.250 per cent.

The new issuance aims to “further diversify ADQ’s funding sources to contribute to financing strategic growth initiatives within the group and build out ADQ’s long-duration credit curve for investors”, ADMO said.

It comes after ADQ issued its inaugural $2.5 billion bond in May, which has a primary listing on the LSE and a secondary listing on the Abu Dhabi Securities Exchange. The dual-tranche bond included five and 10-year tenors and was oversubscribed more than 4.4 times.

“ADQ’s second bond issuance under its Global Medium Term Note Program reflects our commitment to forward-looking financial management and a strong capital structure,” said Marcos de Quadros, group chief financial officer at ADQ.

“With this issuance, we now offer an expanded bond curve to investors.”

ADQ, established in 2018, had total assets worth $225 billion as of June 30. It has shareholdings in more than 25 portfolio companies across seven economic clusters which cover vital sectors of the Abu Dhabi economy.

They span sectors including energy, utilities, food and agriculture, health care, pharmaceuticals, mobility and logistics. Some of the companies in its portfolio include Abu Dhabi National Energy Company, better known as Taqa, the Emirates Nuclear Energy Corporation, Abu Dhabi Airports, Abu Dhabi Ports Group, Etihad Rail and Abu Dhabi National Exhibitions Company.

ADQ is also boosting its investments globally. It has become an investor alongside the Bank of Montreal in the Canadian alternative asset management company Sagard. In April, it revealed plans to buy a 49 per cent stake in Melbourne-based Plenary, marking its entry into Australia and growing its portfolio in the public infrastructure sector globally.

In February, ADQ also said it was leading a consortium that would invest $35 billion in major projects in Egypt, including acquiring the development rights for Ras El Hekma, a coastal region about 350km north-west of Cairo.