Abu Dhabi Offers More Bonds as Borrowers Stockpile Cash - Bloomberg:
Abu Dhabi is seeking to raise more money from international debt markets just weeks after a $7 billion bond sale as it takes advantage of a drop in borrowing costs to bolster its finances.
The emirate is marketing a tap of its three-tranche deal priced in April, according to people familiar with the matter who asked not to be identified because the matter is private. The yields on those bonds, which garnered about $45 billion in orders last month, declined on Monday to all-time lows as optimism that the worst of the oil crisis triggered by the coronavirus pandemic is over offered relief for energy-related borrowers.
“For Abu Dhabi, pricing was never an issue, they are a solid credit with good sponsorship,” said Angad Rajpal, the head of fixed income at Emirates NBD Asset Management in Dubai. “It will receive good interest and it is a smart call to tap and further shore up their buffers than to draw down on the reserves.”
The yields that are initially on offer are about 30 basis points to 35 basis points higher than Abu Dhabi’s existing debt, Rajpal said. “I would expect levels to tighten and price not too far from the original notes,” he said.
Abu Dhabi is seeking to raise more money from international debt markets just weeks after a $7 billion bond sale as it takes advantage of a drop in borrowing costs to bolster its finances.
The emirate is marketing a tap of its three-tranche deal priced in April, according to people familiar with the matter who asked not to be identified because the matter is private. The yields on those bonds, which garnered about $45 billion in orders last month, declined on Monday to all-time lows as optimism that the worst of the oil crisis triggered by the coronavirus pandemic is over offered relief for energy-related borrowers.
“For Abu Dhabi, pricing was never an issue, they are a solid credit with good sponsorship,” said Angad Rajpal, the head of fixed income at Emirates NBD Asset Management in Dubai. “It will receive good interest and it is a smart call to tap and further shore up their buffers than to draw down on the reserves.”
The yields that are initially on offer are about 30 basis points to 35 basis points higher than Abu Dhabi’s existing debt, Rajpal said. “I would expect levels to tighten and price not too far from the original notes,” he said.
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