Dubai: Abu Dhabi’s $5 billion bond issue was oversubscribed with an aggregate of over 600 orders, exceeding $17 billion, the WAM said on Tuesday.
The 5-year Bond was priced at a yield of 2.218 per cent, the 10-year Bond with a yield of 3.154 per cent with a spread of 85 bps and 125 bps respectively, over the relevant US Treasury.
Countries in the Gulf have been resorting to raising finances through capital market to plug the budget deficits due to a fall in oil prices. The Abu Dhabi government’s deficit will decline to 11.6 per cent of gross domestic product in 2016 from 13.2 per cent last year amid oil’s plunge, Fitch Ratings said.
“The emirate has adopted a prudent, model for comprehensive development over the course of more than five decades, by adopting balanced fiscal policy and building a solid budget for the public sector and maintaining moderate level of public debt, which has led to strong credit profile and large fiscal buffers,” Riyad Al Mubarak, Chairman of the Department of Finance Abu Dhabi, said in a statement.
The emirate has the third highest investment grade rating from Standard & Poor’s. Abu Dhabi last tapped investors with a bond in April 2009, selling $1.5 billion in 10-year securities.
