The government of Abu Dhabi started meetings with investors in Europe this week to brief them on the sheikhdom’s budget and economy, two people familiar with the meetings said.
Officials will meet investors in Germany on Tuesday, in London on Wednesday and in the United States in two weeks, said one of the people, declining to be identified because the details are private. The sit-downs, which started in Switzerland on Monday, aren’t related to immediate plans to sell bonds, they said.
Abu Dhabi last sold bonds in April 2009, when it raised $3 billion from five-year and 10-year securities. The government’s 2030 economic plan targets seven percent annual growth through 2015 and six percent thereafter. The emirate won’t reach that this year, Mohamed Omar Abdulla, undersecretary at the Abu Dhabi Department of Economic Development, said in February.
The International Monetary Fund said in May the economy will expand 3.7 percent this year, while Dubai’s economy will shrink about 0.5 percent. Abu Dhabi, the richest of seven states that make up the UAE, is rated Aa2 by Moody’s Investors Service, the third-best investment grade.
Borrowers from the Persian Gulf sold $16 billion of bonds so far in 2010, compared with $22.8 billion in the year-earlier period, according to data compiled by Bloomberg. In July a unit of Waha Capital PJSC, an Abu Dhabi-based leasing company, sold $1.5 billion of debt and National Bank of Abu Dhabi PJSC raised $750 million by selling five-year notes in March.
The emirate forecast a second consecutive budget deficit this year, according to a government-guaranteed bond prospectus in July. Government spending will exceed revenue by AED84.9 billion ($23 billion), compared with a deficit of AED126.5 billion in 2009, the data shows.
Dubai’s government borrowed $20 billion last year from Abu Dhabi, two of its banks and the UAE central bank to help state-owned companies facing problems raising funds because of the global financial crisis. (Bloomberg)
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