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The Abu Dhabi Achieves $2Billion bond sale

The Abu Dhabi emirate has successfully achieved the ale of $2 billion of 7-year sovereign note. The statement was released by the government’s media office said on Thursday.

The bonds were broadly accepted by fixed-income investors. These investors included various American companies and investment portfolios. The companies made a significant contribution by extending the investor base in the emirate, Abu Dhabi said in the statement.

The UAE was adversely affected by the pandemic and last year’s crash in oil prices. Although, a rebound in global crude demand as economies reopen has decreased the necessity to borrow for budget purposes.

“Seven years is the sweet spot in the market right now. A lot of issuers are choosing seven or 12 years because of the macros of rates,” Zeina Rizk, executive fixed-income director at Arqaam Capital, told. Zeina spoke this to Reuters last month when the sale was announced.

Some of the funds raised might be used to raise Abu Dhabi’s foreign currency reserves, she said.

Abu Dhabi has become a relatively regular issuer of US dollar-denominated debt in the last years and tapped the market 3 times last year for a total of $15 billion.

During the last months of 20202, it had $40 billion in outstanding bonds and $3.9 billion in outstanding loans. Outstanding bonds and loans equaled $29.4 billion at the end of 2019, the prospectus displayed.

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