Clifford Chance advises on historic first bond issue by the Federal Government of the UAE

Clifford Chance has advised the Federal Government of the United Arab Emirates, acting through the Ministry of Finance (the “Federal Government”) on the establishment of its Global Medium-Term Note Programme and inaugural issuances thereunder.

The Federal Government issued USD4bn across three tranches: (i) USD1 billion 2.000 per cent. Notes due 2031 (the “2031 Notes”); (ii) USD1 billion 2.875 per cent. Notes due 2041 (the “2041 Notes”); and (iii) a Formosa tranche of USD2 billion 3.250 per cent. Notes due 2061 (the “Formosa Notes”). The Notes were issued in accordance with Regulation-S/Rule 144A of the U.S. Securities Act of 1933, as amended, and all three tranches are expected to be listed on the London Stock Exchange, Nasdaq Dubai and the Abu Dhabi Securities Exchange. The Formosa-tranche will additionally also be listed on Taipei Stock Exchange.

Although individual emirates of the United Arab Emirates have issued in the international capital markets before, this transaction was the first time the Federal Government accessed the international capital markets. The Federal Government intends to use the proceeds for its domestic budgetary purposes in compliance with its Public Debt Strategy.

Clifford Chance’s team comprised partner and head of Middle East Capital Markets, Stuart Ure (Dubai), U.S. Securities partner, John Connolly (London), Rafe Khokhar (senior associate, Dubai), Chris Osborne (US senior associate, London), Kelly Frevele (US associate, London), Sophie Wilkinson (associate, Dubai), and Ursula Gil (capital markets knowledge director, Dubai).

Stuart Ure commented, “With the historic establishment of the Federal Government’s programme and issuance thereunder, Clifford Chance continues to build on our track record in sovereign capital markets transactions. We are delighted with the success of the inaugural offering by the Federal Government, having created, with the Federal Government, the legal framework for future issuances. The success of the transaction is testament to the efforts of the Federal Government and the working group involved on the transaction.”

In respect of the 2031 Notes and the 2041 Notes, Abu Dhabi Commercial Bank PJSC, Citigroup Global Markets Limited, Emirates NBD Bank PJSC, First Abu Dhabi Bank PJSC, HSBC Bank plc, J.P. Morgan Securities plc, Mashreqbank psc, Merrill Lynch International and Standard Chartered Bank acted as Joint Lead Managers. In respect of the Formosa Notes, Citibank Taiwan Limited, HSBC Bank (Taiwan) Limited, J.P. Morgan Securities (Taiwan) Limited and Standard Chartered Bank (Taiwan) Limited acted as Joint Lead Managers and Abu Dhabi Commercial Bank PJSC, Emirates NBD Bank PJSC, First Abu Dhabi Bank PJSC, Mashreqbank psc and Merrill Lynch International acted as Structuring Agents.