The United Arab Emirates is returning to the international bond market for the first time in well over a year.
(Bloomberg) — The United Arab Emirates is returning to the international bond market for the first time in well over a year.
The oil-rich Persian Gulf nation plans to sell dollar-denominated bonds with a 10-year tenor, according to a person familiar with the matter, who asked not to be identified because they’re not authorized to speak about it. The initial price target is set at about 85 basis points over Treasuries and the notes are expected to price today, the person said.
The government plans to raise at least $1 billion through the sale, Bloomberg reported last week.
The UAE has been pushing to develop its position as a global hub for business and finance, especially as it faces growing regional competition from larger neighbor Saudi Arabia. The country is looking to accelerate economic growth as it seeks to double its gross domestic product to over $800 billion by the end of the decade. The nation saw its economy expand almost 8% in 2022, thanks in part to higher crude prices and production. This year, the International Monetary Fund projects GDP growth will slow to 3.5%.
The nation’s debt is rated Aa2, the third-highest investment grade, by Moody’s Investors Service, and one step lower at AA- by Fitch Ratings.
Read more: Saudi Arabia to Raise $11 Billion in Biggest EMEA Loan This Year
Abu Dhabi Commercial Bank, BNP Paribas SA, Citigroup Inc., Emirates NBD Capital, First Abu Dhabi Bank, Goldman Sachs Group Inc., HSBC Holdings Plc, Mashreq and Mizuho Financial Group Inc. are working on the deal.
The UAE, which comprises seven emirates, raised $3 billion in bonds in June 2022 when it took advantage of demand for high-quality debt amid mounting concern over a global recession.
(Updates with economic expansion in fourth paragraph. A previous version of the story corrected the timeframe of when the UAE last sold dollar bonds.)
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