ADX lists US$ 100 million sovereign bonds for ADFD
Abu Dhabi,03 May 2018
The Abu Dhabi Securities Exchange the region’s leading financial market, listed today a sovereign bond through a private placement for ADFD issued by the Government of Maldives. The bond, denominated in US dollars, was listed by The Maldives Ministry of Finance and Treasury on the Abu Dhabi Exchange Securities Market and is worth US$ 100 million with a five year maturity (2023) and a coupon rate of 5.5 per cent per annum. The bonds are rated B+ by Fitch Ratings.
This historic listing is the first foreign sovereign bond to have a primary listing on any stock market in the UAE and the region, reflecting the Exchange’s leading position in the international market in part thanks to its advanced technical and organisational infrastructure.
HE Dr. Hussain Niyaz. Ambassador of the Republic of Maldives to the UAE rang the opening bell in ADX to mark the start of trading; in the presence of HE Mohammed Saif Al Suwaidi, Director General of Abu Dhabi Fund for Development (ADFD) and Chief Executive of ADX, Rashed Al Blooshi, and representatives from First Abu Dhabi Bank (FAB), as the arranger and lead manager on this transaction.
HE Dr. Hussain Niyaz, Ambassador of the Republic of Maldives to the UAE said that the Government of Maldives recognises and appreciates the important role that ADFD has played in the development of Maldives over the past four decades, providing financing in areas of infrastructure development, transport, telecommunication, housing and energy. In 2017, ADFD provided U.S. $50 million to primarily finance the development of a new terminal at Velana International Airport.
The Maldivian Ambassador stressed the distict position that the UAE and specifically Abu Dhabi holds as a center for capital markets in the region in virtue of its world class regulatory structure. HE said: “This issuance strengthens the Government of Maldives’ strategy and its ability to find the necessary funding as it prepares to expand its expenditure on development projects and accelerate the economic and social development of the country.”
On his end, HE Mohamed Saif Al Suwaidi stressed the supporting role of ADFD to the Maldivian government and the financial aid it has given it to develop infrastructure projects. He pointed out that ADFD is providing financial assistance to a number of developing countries in various continents, including the Maldives, with whom they have held a relationship since 1967. ADFD supported Maldives in financing AED 550 million for the country’s sustainable economic development.
He added that the process of listing sovereign bonds in ADX for ADFD is indicative of the ongoing successful implementation of its investment strategy. This action not only guarantees good financial returns but also helps ensure the sustainability of the Fund's main activity in providing concessionary loans. The Fund carries out investment activities to enhance its resources and financial revenues through equity participation and liquidity management.
ADFD pursues a two-pronged investment strategy in this area, including direct investment in selected companies across different countries, and the management of available liquidity in a way that enables revenue to support its financial resources. The Fund invests in 15 strategic companies, four private portfolios with a total value of AED 3 billion.
HE Al Blooshi added that the listing reaffirms ADX’s leading position across the region, given the confidence of governments in ADX, as well as its technical and organisational readiness to list and trade fixed income instruments, and its adoption of an advanced settlement and clearing system.
HE said: “ADX seeks to become the preferred listing and trading platform, and works on consolidating its position as a leading market in the region by providing the most innovative products and services to ensure a fair and secure investment environment. It also strives to strengthen the local economy and its sustainable development, in line with the Abu Dhabi Plan by developing the financial services sector, creating an attractive business and investment environment in the Emirate.”
HE pointed out that ADX has a world-class infrastructure for the listing and trading of diversified securities, primarily bonds, and provides investors with the opportunity to invest their savings in a legal environment that adopts the best international practices in disclosure and transparency, within a stable economic and regulatory environment, attractive for foreign capital. Al Blooshi affirmed that the market continues its efforts to diversify investment and hedging tools and continue in its efforts to raise the level of investment liquidity, in order to attract new investors experienced with modern investment tools.
These bonds are the second issuance by the Republic of Maldives to be listed on the international capital markets, following a successful debut listing on the Singapore Stock Exchange in May 2017. The proceeds of the bonds will be used to fund ongoing and proposed projects and programs for the year.
ADX is one of the region's leading financial markets for innovative services and was the first in the MENA region, and third in the world, to implement Blockchain technology in e-voting services. In 2017, the Exchange attracted 573 investors, 460 of them are foreign investment institutions. The 25 biggest international Assets Management institution are actively investing in ADX and also 350 of the biggest International Pension Funds. As of the Q1 2018, the number investment institutions operating in the market amounted to 7792, with 5803 foreign investment institutions.