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Abu Dhabi sells $3 billion in bonds

Filed on May 20, 2020 | Last updated on May 20, 2020 at 12.14 am
Abu Dhabi received around $45 billion in orders for the April deal. - Reuters

Abu Dhabi issued in April $7 billion in bonds due in 2025, 2030 and 2050.

Abu Dhabi sold $3 billion in bonds on Tuesday with a tap of dollar bonds issued last month, a document showed, as governments in the Gulf seek extra cash amid the coronavirus pandemic and a slump in oil prices.

Abu Dhabi issued in April $7 billion in bonds due in 2025, 2030 and 2050, just after a jumbo $10 billion bond sale by Qatar. Considered among the best credits in the region, Abu Dhabi received around $45 billion in orders for the April deal.

It has now gone back to the markets with a bond tap, where an existing transaction is reopened for subscription using the same documentation as before. It is set to raise $3 billion more, according to a document issued by one of the banks leading the deal and seen by Reuters.

The deal has attracted around $20 billion in orders. The emirate sold $1 billion in each tranche. It is offering 135 basis points over US Treasuries for the bonds due in 2025, 150bps over the same benchmark for the tranche due in 2030, and 3.25 per cent for the notes due in 2050, according to the document. It tightened the spreads by 30 to 35bps from where it began marketing them earlier on Tuesday.

"As expected, the pricing is in line with the earlier tranche," a Dubai-based fixed income strategist said.

"The interesting point to note is there is no skew in demand towards the 30-year bonds, unlike in April, when investors clearly preferred the long end. We believe high dollar price might one of the reasons for this," he said. - Reuters

 


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