The government of Abu Dhabi is in talks with banks for a new international bond issue, sources said, having already raised $10 billion via debt issues this year to prop up its finances amid low oil prices and the coronavirus crisis.
Hydrocarbon-dependent Gulf states have raised billions of dollars to refill state coffers this year and more deals are expected in coming months, with ratings agency S&P predicting a record $100 billion jump in debt this year.
Oil-rich Abu Dhabi – rated AA by Fitch and S&P and Aa2 by Moody’s, making it overall the highest-rated sovereign issuer in the Gulf – raised $10 billion through an initial $7 billion bond in April which was re-opened the following month.
It is now discussing a new transaction and has picked a group of banks to arrange it, said two sources familiar with the matter without identifying the banks involved.
Abu Dhabi’s department of finance did not immediately respond to a request for comment.
Abu Dhabi, whose fiscal balance depends largely on revenue from hydrocarbon royalties and taxes and dividends received from ADNOC, its national oil company, said in June it would consider raising more money via the bond markets.
“The emirate’s net asset position, which exceeds 200 percent of GDP despite the recent oil price decrease, ensures that Abu Dhabi continues to be in a strong position to leverage market windows,” the department of finance said at the time.
Sources had told Reuters earlier this year that Abu Dhabi planned to engage global fixed income investors on a more regular basis because of low oil prices.
Other Gulf countries such as Saudi Arabia and Bahrain have said they plan to tap debt investors at least once more this year.