Abu Dhabi to sell dollar bonds amid demand for high quality debt

Abu Dhabi is tapping international debt markets for the first time in two years as it seeks to take advantage of relatively low borrowing costs.

The oil-rich emirate plans to sell benchmark-sized dollar-denominated bonds in three maturities on Monday, said a person familiar with the matter, who isn’t authorised to speak publicly and asked not to be identified. They include:

* Debt due 2024 to yield around 80 basis points more than Treasuries of similar maturity

* Securities due 2029 at a spread of about 100 basis points, and 2049 bonds at 125 basis points

* Abu Dhabi is taking advantage of investor demand for high quality debt amid concerns over the US-China trade war and slowing global growth. The emirate’s credit rating is among the strongest in the Middle East and Africa, and the cost to insure its debt against default is the lowest in the region.

The yield on the emirate’s dollar bond due 2047 was at 3.03 per cent Friday, near the all-time low of 2.8 per cent reached this month. The new securities will likely be rated Aa2 by Moody’s Investors Service Inc. and AA by S&P Global Ratings and Fitch Ratings Ltd.