Abu Dhabi National Oil Company (ADNOC), the UAE’s largest oil producer, plans to issue its first bonds denominated in Chinese yuan, in the latest sign of deepening financial ties between China and the Gulf states.
The company may raise up to 14 billion yuan (approximately $2 billion) through a dim sum bond offering—Chinese currency-denominated securities issued in offshore markets—according to people familiar with the matter. They added that the final size of the offering may not necessarily reach this figure, and some details are still subject to change.
This issuance will boost the total value of dim sum bonds issued by companies since the beginning of the year, which reached a record high of 57.6 billion yuan.
Increasing trend among Gulf countries to borrow in yuan
Borrowers in the Gulf region are increasingly turning to yuan-denominated financing, after China overtook the West to become the region's largest trading partner by 2024. This trend reflects growing bets on accelerating the internationalization of the Chinese currency, while simultaneously fueling a broader narrative of reducing reliance on the dollar.
In this context, financing costs in yuan could be lower than those denominated in dollars, given the Chinese authorities' move to lower interest rates in order to support the economic recovery.
The Middle East has recently witnessed several steps in the field of yuan financing, including the Sharjah government obtaining a guaranteed loan, the Saudi National Bank studying the issuance of dim sum bonds, in addition to the Arab Energy Fund’s plan to issue yuan-denominated bonds within the local Chinese market.
ADNOC's potential bond issuance options
ADNOC is considering a multi-tranche structure for a potential bond offering, with maturities of five, ten, and thirty years, according to people familiar with the matter. These individuals, who requested anonymity due to the sensitivity of the details, indicated that the deal could be launched as early as this month.
In response to a question about the potential debt sale, an ADNOC spokesperson said: We do not comment on market speculation.
The company has been considering a potential IPO for several months, following a virtual roadshow unrelated to a specific deal last October, aimed at testing investor appetite.
According to a report issued by the Asia House research center, the volume of trade exchange between the Gulf countries and China reached $257 billion in 2024, with expectations of it rising to $375 billion by 2028.
