Abu Dhabi issues more bonds in the international market to raise cash

Analysts said it is a smart call to shore up buffers than to draw down on the reserves

Last updated:
2 MIN READ
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.
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.
Abdul Rahman/Gulf News Archive

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."

Pricing

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.

Sign up for the Daily Briefing

Get the latest news and updates straight to your inbox

Up Next