Abu Dhabi said to be planning bond sale

Abu Dhabi has mandated banks to arrange its first benchmark-sized US dollar bond in seven years, according to a lead manager.

Abu Dhabi has hired Bank of America Merrill Lynch, Citigroup and JP Morgan to organise investor meetings in the United Arab Emirates, Europe and the US, starting from Tuesday.

A 144A/Reg S deal, which allows the securities to be sold in the United States, may follow subject to market conditions.

Abu Dhabi’s last foray into the dollar market was a US$1.5 billion 10-year that priced in April 2009 with a 6.75 per cent coupon.

That is trading at a yield of 1.24 per cent, according to Eikon prices.

This will be Abu Dhabi’s third Eurobond, after debuting in 2007.

Moody’s last month put Abu Dhabi’s Aa2 rating on review for downgrade, citing the impact of sharp falls in oil prices.

“The structural shock to the oil market is weakening Abu Dhabi’s government balance sheet and its economy,” said the ratings agency.

However, the emirate is rated AA by Standard & Poor’s and Fitch, with both agencies affirming their ratings in February, citing the issuer’s ability to withstand oil price shocks.

The roadshow will begin on Abu Dhabi on Tuesday before moving to London and the US on Wednesday. It finishes on Friday. It will be conducted through two teams.


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