Abu Dhabi mandates banks for 5, 10, 30-year US dollar bonds

Emirate seeks to take advantage of low rates to offset impact of volatile oil prices

ABU DHABI, Sept 23, (RTRS): The government of Abu Dhabi has mandated banks for the sale of benchmark US dollar fixed-rate bonds covering maturities of five, 10 and 30 years, a document seen by Reuters showed on Monday.

Abu Dhabi has mandated BNP Paribas, Citigroup, First Abu Dhabi Bank, HSBC, JP Morgan and MUFG to act as joint lead managers and joint book runners for 144A Reg S senior unsecured bonds, according to the document.

A 144A lets a non-US issuer tap the US market without registering on a US exchange, while a Regulation S offering is a bond issued in the Eurobond market for international investors,

Abu Dhabi started marketing the five-year notes at around 80 basis points over US treasuries, the 10-year at around 100 bps over the same benchmark, and the 30-year at around 125 bps over, a separate document showed.

Reuters had reported earlier this month that Abu Dhabi plans to issue US dollar-denominated bonds this year, citing sources, its first since 2017 as the oilrich emirate seeks to take advantage of low rates to offset the impact of volatile oil prices.

Governments in the Gulf Cooperation Council region have borrowed billions of dollars globally over the past few years to refill state coffers hit by lower oil prices.

Abu Dhabi, the capital of the United Arab Emirates (UAE), has the biggest hydrocarbon reserves among the UAE’s seven emirates and its fiscal position is among the strongest in the region.

Abu Dhabi enjoys a rating of Aa2 by rating agency Moody’s, AA by S&P and AA by Fitch, with outlooks stable by all three rating agencies, the document said.

The UAE central bank on Sunday said the country’s economy is expected to grow 2.4% in 2019, driven by faster growth in the oil sector, above 1.7% in 2018.