PHOTO
DUBAI - Oil-rich Abu Dhabi will consider raising more money via the bond markets to protect its finances from the impact of low oil prices, it said in a statement, after raising $10 billion in bonds this year.
Abu Dhabi's fiscal balance depends almost entirely on revenue from hydrocarbon royalties and taxes and dividends received from ADNOC, its national oil company.
With the highest credit rating in the Gulf region, Abu Dhabi attracted strong demand from investors for its fundraising this year, which was split into a $7 billion bond in April and a $3 billion re-opening of the same deal last month.
"The emirate's net asset position, which exceeds 200% of GDP despite the recent oil price decrease, ensures that Abu Dhabi continues to be in a strong position to leverage market windows," Abu Dhabi's department of finance said in the statement on Wednesday.
"We will continue to leverage such windows as part of our mandate to safeguard the wealth of the emirate," Jassim Mohammed Buatabh Al Zaabi, chairman of the department, said.
Sources had told Reuters earlier this year that Abu Dhabi planned to engage global fixed income investors on a more regular basis this year because of low oil prices.
S&P Global Ratings said last month Abu Dhabi's real gross domestic product is expected to contract by 7.5% this year because of lower oil production and the impact of the new coronavirus outbreak, and its fiscal deficit will rise to about 12% of GDP this year from 0.3% in 2019.
For the $7 billion bond in April, Abu Dhabi attracted around $45 billion in orders. The $3 billion reopening, or tap, of that bond last month was seven times oversubscribed, the department of finance said.
Abu Dhabi said it would use the proceeds of the bond tap "to accelerate non-hydrocarbon sector growth with a view to building a resilient, sustainable post-COVID-19 economy."
(Reporting by Davide Barbuscia. Editing by Jane Merriman) ((Davide.Barbuscia@thomsonreuters.com; +971522604297; Reuters Messaging: davide.barbuscia.reuters.com@reuters.net))