DUBAI: The United Arab Emirates government is expected to begin marketing its first bond as a federation as soon as this week, a transaction denominated in US dollars, four sources familiar with the matter said on Sunday.

The UAE federal government has never issued bonds before, although several of the seven emirates that it comprises have, including the capital Abu Dhabi and commerce hub Dubai.

Banks advising the government on the fundraising exercise include Citi, HSBC, First Abu Dhabi Bank, JPMorgan, Standard Chartered and BofA Securities, two of the sources said.

The UAE government media office and finance ministry did not immediately respond to emailed requests for comment from Reuters.

First Abu Dhabi Bank declined to comment, while the other banks did not immediately respond to comment requests.

Two sources said they expected it to be a multi-billion dollar deal, a transaction of benchmark size.

"They wouldn't get out of bed for less than $1-$2 billion," one of them said.

The government issued a law in 2018 permitting the federal government to begin issuing sovereign debt.

On Thursday, ratings agency Moody's assigned the UAE a provisional Aa2 rating, in line with Abu Dhabi's, for its new global medium-term note programme, which it said may be denominated in various currencies and have different maturities.

The UAE is widely expected to also use the programme to issue bonds denominated in dirhams, a goal long held by authorities to deepen the country's financial markets.

In January, Dubai's ruler, Sheikh Mohammed bin Rashid al-Maktoum, who is also the UAE's prime minister, said the UAE cabinet approved a public debt strategy aimed at developing the market for local currency bonds. The UAE's fellow Gulf states already have active local currency bond markets.