December 6, 2018 / 12:05 PM / 10 days ago

Abu Dhabi meets bond investors in non-deal roadshow, sources say

ABU DHABI/DUBAI, Dec 6 (Reuters) - Abu Dhabi held meetings with international bond investors in a so-called non-deal roadshow before a potential bond issue next year, sources familiar with the matter said, as a recent drop in oil prices might prompt Gulf countries to borrow soon.

Governments in the Gulf Cooperation Council region have raised billions of dollars in the international debt markets over the past few years to offset budget deficits caused by lower oil prices.

Representatives of the Abu Dhabi government met investors in Frankfurt, London, Boston and New York about a week ago, said one of the sources. A non-deal roadshow is a series of investor meetings not tied to a specific transaction.

Abu Dhabi's Department of Finance did not immediately respond to a request for comment.

Oil-rich Abu Dhabi, which last year raised $10 billion in bonds, has been in talks with investors at various stages this year, banking sources previously said, but a rise in oil prices meant the emirate felt no urgency to borrow.

Market volatility across emerging markets over the past few months has also led some issuers to postpone their borrowing plans.

However, a recent slump in oil prices, which are down around 30 percent since early October, might push even price-sensitive issuers like Abu Dhabi – long-seen as the safest credit in the Gulf Cooperation Council – to tap the international debt markets, despite negative market conditions.

Bank of America Merrill Lynch and HSBC arranged the meetings, the sources said. Both the banks declined to comment.

Abu Dhabi, rated AA by S&P and Fitch and Aa2 by Moody’s, attracted more than $30 billion in demand with its last international debt issue last year.

That bond sale was split into a $3 billion tranche with a five-year maturity, $4 billion in 10-year notes and $3 billion in 30-year notes. Bank of America Merrill Lynch, Citi, First Abu Dhabi Bank, HSBC and JPMorgan arranged the deal. (Editing by Larry King)

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