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UAE borrows $7bn to counter slumping oil prices

April 20, 2020 at 1:54 pm

International Monetary Fund (IMF) [World Bank Photo Collection/Flickr]

The Emirate of Abu Dhabi has priced a $7 billion multi-tranche international bond offering as an integral component of its medium-term strategy to combat the drop in oil prices due to coronavirus pandemic, the Abu Dhabi Department of Finance said yesterday.

Abu Dhabi, which has the biggest sovereign wealth fund in the Gulf Cooperation Council (GCC), announced that its offering was oversubscribed by more than six times, AFP reported.

“The success of the issuance, particularly amidst the global uncertainties caused by the COVID-19 pandemic and the oil price decline, is testament to the continued confidence placed in our aptitude to generate sustainable economic growth,” the department’s Chairman, Jassim Al Zaabi, said.

OPEC kingpin Saudi Arabia last week raised $7 billion in a bond sale, while gas-rich Qatar sold bonds worth $10 billion two weeks ago.

READ: Saudi minister plays down oil dispute with Russia

Global oil prices have slumped this year due to population lockdowns to forestall the spread of coronavirus and a price war between Saudi Arabia and Russia.

On 9 April, oil producing nations, including GCC states and Russia agreed to historic oil cuts as the coronavirus pandemic continues to crush global demand for crude.

According to the International Monetary Fund (IMF), the world will very likely experience its worst recession since the 1930s and the combined economies of GCC states are forecast to shrink by 2.7 per cent this year.