Key Highlights
- •Emirates NBD has successfully issued a $272 million digital bond, a pioneering initiative for the MENA region.
- •The bond is listed on Nasdaq Dubai, underscoring the UAE's prominent position in digital finance innovation.
- •This issuance signifies a notable advancement in the maturity and adoption of digital debt markets.
Pioneering Digital Bond Issuance
Emirates NBD has issued a $272 million digital bond utilizing distributed ledger technology through Euroclear's D-FMI platform. This marks the first AED-denominated public digital bond to be offered in the Middle East. The bond was oversubscribed, indicating strong investor confidence and reinforcing the UAE's leadership in the digital finance sector. This development has the potential to transform regional debt markets by enhancing transaction efficiency and transparency.
Details of the Issuance
Emirates NBD has launched AED 1 billion ($272 million) in 3-year Digitally Native Notes (DNNs) with a 4.25% coupon. This issuance represents the Middle East's first AED-denominated digital bond. The bond, which was oversubscribed 1.3 times, leveraged distributed ledger technology (DLT) for its creation and management. The issuance was listed on Nasdaq Dubai to ensure trading transparency and was conducted under the Euro Medium Term Note (EMTN) Programme. The DLT infrastructure was provided by Euroclear's D-FMI platform, with Emirates NBD Capital and Standard Chartered serving as joint note structurers.
Driving Digital Finance in the UAE
This significant issuance highlights the UAE's supportive and pro-business regulatory environment, aiming to establish new benchmarks for digital assets across the Middle East. Hamed Ali, CEO of Nasdaq Dubai, emphasized the bond's crucial role in accelerating the maturity of the digital debt market. The bond attracted participation from a diverse investor base, demonstrating substantial market demand. Salman Ansari from Standard Chartered acknowledged the successful integration of market infrastructure with DLT, which is a key factor in modernizing regional capital markets.
Focus on Fiat Currency and Market Stability
Emirates NBD's initiative focused on utilizing a private DLT platform for fiat currency, distinct from the cryptocurrency market. The issuance did not lead to any changes in the Moody's or Fitch ratings for Emirates NBD, suggesting continued stable confidence in the bank and its innovative financial models.
Historical Context and Future Implications
Emirates NBD has a history of engaging in various digital financial initiatives, including past issuances of blue and green bonds. This latest digital bond issuance further solidifies the technical and financial viability of using DLT to modernize and improve efficiency within debt markets. It also points towards the potential for streamlining future financial transactions through similar technological advancements.
Executive Commentary
Ahmed Al Qassim, Group Head of Wholesale Banking at Emirates NBD, stated: "This issuance is a landmark for Emirates NBD and the region’s debt capital markets, highlighting our leadership in digital finance. Supported by pro-business regulations and a forward-thinking approach to financial services, the UAE continues to set new benchmarks for digital assets and distributed ledger technology throughout the Middle East."