The Government of Abu Dhabi has raised $3 billion in a dual-tranche bond sale, securing the tightest spreads in its history amid overwhelming investor demand that reached $18.5 billion, underscoring the emirate’s premium credit status.
The issuance was more than five times oversubscribed, enabling the emirate to price the bonds at record-low levels. The offering comprised $1 billion in three-year notes at a spread of 10 basis points over US Treasuries and $2 billion in 10-year bonds at just 18 basis points—the tightest spread ever achieved by an emerging market sovereign for a bond of that maturity.
Jassem Mohammed Bu Ataba Al Zaabi, Chairman of the Department of Finance, said the issuance “marks a historic milestone” that “reflects global investor confidence in our prudent governance, diversified economy, and disciplined fiscal strategy.”
The pricing, reported by Bloomberg, places Abu Dhabi’s risk premium approximately 94% below the average for emerging markets. Strong demand from local and Asian investors drove the favorable terms.
Al Zaabi added that the outcome “reaffirms Abu Dhabi’s position as a leading and trusted investment destination,” highlighting that accessing global capital markets on competitive terms helps secure lower-cost capital for the strategic entities driving the emirate’s economic growth.
Abu Dhabi’s AA stable credit ratings from Fitch and S&P provided a solid foundation for the offering. A syndicate of twelve global and regional banks, including Citi, First Abu Dhabi Bank, Goldman Sachs, and HSBC, acted as joint bookrunners.
The successful sale demonstrates a continued flight to quality among global investors, who are favoring highly rated Gulf sovereigns. The record-low borrowing costs will provide Abu Dhabi with flexible financing to advance its long-term economic diversification agenda while reinforcing its reputation as a disciplined sovereign issuer.
