Abu Dhabi in talks with banks for new debt issues

Abu Dhabi has been in talks with banks for potential debt sales in the international markets this year as the oil-rich emirate plans to engage global fixed income investors on a more regular basis amid low oil prices, sources said. Abu Dhabi, which has one of the best credit ratings in the region, issued its latest international bonds in September last year, raising $10 billion for budgetary purposes and garnering almost $20 billion in demand.

After a reshuffling at its finance department last year, the government has been in talks with banks on several fundraising options, taking a more proactive approach to debt financing, said the sources. "They want to issue more regularly and in smaller sizes, rather than huge $10 billion deals like last year," one of them said.

"As part of its mandate, the Abu Dhabi Department of Finance constantly evaluates options under the existing bond issuance programme," it told Reuters in an emailed statement. "However, as a matter of policy, the Department does not respond to market rumours," it added.

Rated AA by S&P and Fitch and Aa2 by Moody's, Abu Dhabi's finances are backed by one of the world's largest sovereign net foreign asset positions and low levels of debt. But its ratings are also constrained "by dependence on volatile oil and gas revenue, an underdeveloped economic policy framework and weak governance indicators relative to 'AA' peers," said Cedric Berry, associate director at Fitch Ratings.