This listing is the first sovereign bond to have a primary listing on any stock market in the UAE and the region
The Abu Dhabi Securities Exchange (ADX) has listed a sovereign bond through a private placement for the Abu Dhabi Fund for Development (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 $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.
HE Mohamed Saif Al Suwaidi, Director General of Abu Dhabi Fund for Development (ADFD) and Chief Executive of ADX, said that the process of listing sovereign bonds in ADX for ADFD 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.
“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,” said Al Blooshi.
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 programmes 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 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.
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.