The Abu Dhabi Government is moving to develop a more mature debt market by issuing a “benchmark” bond, bank sources say.
The news follows calls from officials and analysts for Gulf governments to issue the bonds, which are necessary for developing debt markets. A bond market attracting a larger number of buyers and sellers could eventually provide companies with an alternative way of raising funds, which have grown scarce since the financial crisis forced banks to cut lending.
The government bond is likely to raise at least US$500 million (Dh1.83bn) and be designed to set a pricing standard against which corporate bonds could then be priced. On Tuesday, the Bahrain government announced plans to issue a similar $500m sukuk. Qatar is also reported to be planning to issue its own benchmark bond.
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