Abu Dhabi raised US$5 billion through a three-tranche bond offering on Tuesday, the oil-rich Gulf emirate's third foray into the international debt markets this year to prop up its finances following a fall in crude prices.
"The pricing was very close to the existing secondary market comparables. Looks like we are back to almost pre-Covid era pricing for regional investment-grade sovereigns," a fixed income strategist said, adding that the 50-year tranche was the longest ever issued from the Gulf. Despite being rated AA by Fitch and S&P and Aa2 by Moody's – making it overall the Gulf's highest-rated sovereign issuer – Abu Dhabi offers higher yields than most of its peers outside the region.
But he said the emirate was seen as the strongest oil sovereign credit globally, and its net sovereign debt was still"very negative" given high foreign assets and low oil break-evens - the oil price it would need to balance its budget.