Abu Dhabi government bond yields rose on concern Gulf states may be affected by escalating tension in Iran, reducing their discount to debt of the emirate's banks to the lowest in more than two months.
The yield gap between Abu Dhabi's 5.5 per cent bond due April 2014 and state-run National Bank of Abu Dhabi bonds of a similar maturity has fallen 22 basis points (bps) to 125 so far this year.
It had dropped to 119.6 basis points, the lowest since November 2, on January 16. That day Iran said "no country" would be able to manage the shock of it disrupting traffic through the Strait of Hormuz.
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