The UAE sold 10-year international bonds worth $1.5 billion, the first since last September, amid strong demand from global investors, according to what Bloomberg reported from an informed source.
The UAE Ministry of Finance set the initial indicative price for the offering at around 90 basis points above similar US Treasury bonds, but due to the demand for the offering, the price was reduced to 60 basis points, as demand exceeded $5.75 billion.
The UAE has one of the highest credit ratings. Moody's has given the UAE a credit rating of Aa2, the same as the UK and South Korea.
This issuance of dollar-denominated bonds is the fourth at the federal level by the UAE government.
The capital, Abu Dhabi, sold $5 billion in bonds in April. The 10-year bonds in the deal were priced at 5.04 percent, a 45 basis point premium over comparable U.S. Treasuries, and are currently trading at about 4.8 percent, according to Bloomberg.
The UAE government has enjoyed a financial boom over the past few years thanks to high oil and natural gas revenues. It is one of the richest countries in the world and among the few countries that manage sovereign wealth funds worth more than $1 trillion.
Bloomberg reported that while the UAE does not need to raise money from the bond market, the new bond offering may aim to improve liquidity in the market by making debt instruments available with different maturities.
