Abu Dhabi is back in the dollar debt market and has disclosed plans to market the longest bond ever offered by Gulf Arab governments as countries in the region raise cash buffers to weather the pandemic and low oil prices.
According to sources, the capital of the United Arab Emirates plans a three-part offering. Each tranche is of benchmark size, which typically means at least $500 million, and the sale includes a 50-year bond.
The indicative pricing on the security is in the 3% area about 30 basis points higher than Abu Dhabi’s debt due in 2050.
The government is taking advantage of low borrowing costs and investor demand for higher returns as it seeks to bolster its finances, with oil prices below what it needs to balance its budget. The wealthiest of the seven emirates that make up the UAE, its debt is rated AA by S&P Global Ratings.