Dubai: Abu Dhabi raised more money from international debt markets just weeks after a $7 billion bond sale as it takes advantage of a drop in borrowing costs to bolster its finances.
The emirate sold an additional $3 billion of its three-tranche deal priced in April, according to people familiar with the matter.
The yields on those bonds, which garnered about $45 billion in orders last month, declined on Monday to all-time lows as optimism that the worst of the oil crisis triggered by the coronavirus pandemic is over offered relief for energy-related borrowers.
"For Abu Dhabi, pricing was never an issue, they are a solid credit with good sponsorship," said Angad Rajpal, the head of fixed income at Emirates NBD Asset Management in Dubai. "It is a smart call to tap and further shore up their buffers than to draw down on the reserves."
Abu Dhabi, is rated AA by S&P Global Ratings. The cost of insuring Abu Dhabi's debt against default for five years has fallen to about 100 basis points, from a more than 10-year high of 162 basis points in March, when crude prices collapsed.
GCC countries such as Saudi Arabia, Qatar, the UAE and Bahrain have sold about $31 billion of bonds this year. Abu Dhabi's Mubadala Investment Co. raised $4 billion last week.
BNP Paribas SA, First Abu Dhabi Bank PJSC, JPMorgan Chase & Co. and Standard Chartered Plc are the joint lead managers for the Abu Dhabi sale.