DUBAI: Abu Dhabi is expected to raise $3 billion in a bond sale on Wednesday, its second of the year for which it received over $9.75 billion in orders for two tranches, a bank document showed.
The emirate set a 10-year portion at 65 basis points (bps) over US Treasuries (UST) and 30-year paper at 3%, settling at the lower end of final price guidance, the document from one of the banks on the deal showed.
It had given an initial price guidance of about 90 bps over UST for the 10-year bonds and around 130 bps over UST for the 30-year notes. BNP Paribas, First Abu Dhabi Bank, JPMorgan, Morgan Stanley and Standard Chartered are arranging the deal, which is expected to close later on Wednesday. Gulf governments are seeking to lock in funding while rates remain at historic lows, despite a rebound in oil that reversed their fortunes after their economies were battered by last year’s historic price crash, along with the impact of the pandemic. Two sources familiar with the matter had told Reuters Abu Dhabi would likely raise around $3 billion. The emirate sold $2 billion in seven-year bonds in May, after hauling in $15 billion from bond issues last year.
Abu Dhabi is expected to post a deficit of $11.7 billion in 2021, although the budget was drafted on an oil price assumption of $46 a barrel. Brent crude was trading at around $72 on Wednesday.
As of end-June 2021, Abu Dhabi had $39.5 billion in outstanding bonds and $3.7 billion in loans from local banks, while it had $2.4 billion in explicitly guaranteed obligations, an investor presentation reviewed by Reuters showed.
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