Abu Dhabi raises $10 billion with triple-tranche bond

The government of Abu Dhabi has sold $10 billion in bonds, its first debt issuance in two years, which attracted hefty demand as the oil-rich emirate takes advantage of low rates to partly offset the impact of falling oil prices on state coffers.

Abu Dhabi has issued $3 billion in five-year bonds, $3 billion in 10-year and $4 billion in 30-year notes, according to a document issued by one of the banks leading the deal and seen by Reuters.

BNP Paribas, Citigroup, First Abu Dhabi Bank, HSBC, JP Morgan and MUFG were mandated as joint lead managers and joint bookrunners for the 144A Reg S senior unsecured bonds, according to the document.

A 144A lets a non-US issuer tap the US market without registering on a US exchange, while a Regulation S offering is a bond issued in the Eurobond market for international investors.

Abu Dhabi started marketing the five-year notes at around 80 basis points over US treasuries, the 10-year at around 100 bps over the same benchmark, and the 30-year at around 125 bps over.

High demand - in excess of $19 billion - meant the emirate was able to reduce those spreads by 15 basis points across all the tranches during the marketing process on Monday.

Reuters, citing sources, had reported earlier this month that Abu Dhabi was planning to issue US dollar-denominated bonds this year. It has a rating of Aa2 by rating agency Moody’s, AA by S&P and AA by Fitch, with stable outlooks assigned by all three rating agencies.