Etisalat lists 1b euro bond issue on Abu Dhabi Securities Exchange

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Heavyweight debt listings and record equity activity – ADX is having it all these days. Image Credit: Gulf News

Dubai: The UAE telecom giant Etisalat has listed its 1 billion euro bonds (Dh4.45 billion) on Abu Dhabi Securities Exchange (ADX). The issue was more than six times oversubscribed, with demand from local and international investors.

This “has provided Etisalat Group with an opportunity to diversify our sources of capital while taking advantage of the improved cost of funding,” said Hatem Dowidar, CEO of Etisalat Group. “Listing on the Abu Dhabi Securities Exchange improves flexibility and transparency for Etisalat Group and investors in the debt capital markets.”

The listing comes on the heels of Abu Dhabi Ports’ $1 billion listing earlier this month and the one in April of a 1.1 billion euro bonds issued by Mamoura Diversified Global Holding, a fully owned entity by Mubadala Investment Company.

More listings planned

Increasing the number of listings on the exchange is a target of the ‘ADX One’ strategy, launched earlier this year with a goal to double market capitalisation over the next three years. First Abu Dhabi Bank acted as a listing agent for Etisalat’s euro bonds. This year, ADX is expecting a total of more than 10 listings and the launch of a derivatives market is scheduled for the fourth quarter.

“Issuers have become increasingly drawn to the ADX because of the investments we have made in products and services over the past year to meet their requirement – this is reflected in the record market capitalisation ADX reached in first quarter,” said Saeed Hamad Obaid Al Dhaheri, CEO of ADX.

When will the bonds mature?

Etisalat Group’s 500 million euro 7-year notes mature on May 17, 2028 and carry a 0.375 per cent coupon, while the 12-year 500-million-euro tranche matures on May 17, 2033 and carries a 0.875 per cent coupon.

The senior unsecured notes were issued under Etisalat’s Euro Medium Term Note Programme and are rated AA- by S&P and Aa3 by Moody’s. Interest rates will be paid out to bondholders annually on 17 May.

Trading on the rise

Equity trading on ADX has increased notably this year, as the exchange’s market capitalization increased 25 per cent during the first quarter to a record Dh936 billion.

In the first three months, total traded value of stocks bought and sold increased five-fold year on year to Dh107.8 billion and the benchmark ADX index advanced 17.2 per cent. Meanwhile, buying and selling by institutional investors increased significantly to Dh92.6 billion in value, from Dh14.6 billion, while trading by retail investors more than doubled to Dh15.1 billion.