Abu Dhabi’s first bond issue in almost two years has been well received by international lenders, raising US$3 billion (Dh11.01bn). The success shows that cautious global lenders are willing to provide funds to highly rated governments in the region, according to bankers.
The debt offering, issued in one of the tightest credit markets in decades, was oversubscribed more than two times as investors offered to buy about $7bn of the bonds. The emirate limited the amount it borrowed to the $3bn.
The issue will be split in two, with one five-year tranche of $1.5bn, and a second tranche of $1.5bn with a tenure of 10 years. They would be priced at 400 and 420 basis points (or hundredths of 1 per cent) over US treasuries respectively, one banker said. The emirate had not decided on how the money would be used, although much of it would be for general budget expenditures, government officials have said.
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