Abu Dhabi raises $10bn in dollar bond sale
Abu Dhabi has raised $10bn from its first ever 30-year dollar bond sale intended to help plug its budget deficit.
Bloomberg cited sources as confirming the emirate had been encouraged by Saudi Arabia’s $12.5bn sale last week and opened books on Monday for a three-part offering ranging from five to 30 years.
On Tuesday, it sold $3bn of five-year notes, $4bn of 10-year notes and $3bn of 30-year notes.
Price guidance for the sale narrowed by 20 basis points to stand at 65 basis points over US treasuries for the five-year notes, 85 basis points for the 10-year notes and 130 basis points for the 30-year notes.
This represented a premium of roughly 10 basis points over the existing 2021 bonds and 15 basis points over the 2026 bonds, according to CreditSights.
However, one Abu Dhabi-based fund manager told Reuters the new premium was not “particularly generous” for investors.
The final terms of the 30-year paper place it around 20 basis points lower than Qatar’s 2046 bonds, according to the newswire.
Abu Dhabi, which carries the third-highest investment grade under S&P Global Ratings’ classification system, previously raised $5bn in April 2016.
Prior to this, it issued a bond in April 2009, selling $1.5bn in 10-year securities.
Moody’s said in a May report it expected Abu Dhabi’s fiscal deficit to come down to 2 per cent of GDP in 2017 and 0.3 per cent of GDP in 2018 as a result of reform efforts and the stabilising oil price.
Bank of America Merrill Lynch, Citigroup, First Abu Dhabi Bank, HSBC and JPMorgan Chase were the joint lead managers and bookrunners on the deal.