Adnoc Prepares Bond Market Debut After Over Two Year Wait

Abu Dhabi’s main oil producer Adnoc is set to make its bond market debut more than two years after creating an entity to pursue such financing. 

The company began a two day roadshow on Monday and is looking to raise five-, 10- and 30-year debt, according to people familiar with the matter who asked not to be identified. 

Abu Dhabi National Oil Co. is expanding oil production in the UAE while seeking overseas acquisitions such as chemical maker Covestro AG. The Middle Eastern company recently completed due diligence for Germany’s Covestro and could move forward with an €11.7 billion offer as soon as this month, Bloomberg previously reported. 

Adnoc generated cash flows in excess of $30 billion in 2023 and around $13 billion in the first half of 2024 according to Moody’s Ratings. It accounts for roughly 75% of government revenues and half the emirate’s gross domestic product.

The proposed debt sale comes amid increasing volatility in global crude prices amid conflicting market signals about economic growth, Chinese energy demand, and plans by OPEC and its allies to bolster oil supplies. 

Saudi Aramco sold $6 billion in a three-tranche transaction in July, its first dollar debt sale since a $6 billion offering in 2021. Strong demand — final order books topped $23 billion — allowed the oil giant to shrink spreads offered on each tranche by at least 35 basis points. 

JPMorgan Chase & Co. and Morgan Stanley will act as global coordinators on the Adnoc sale. BofA Securities, Citigroup and First Abu Dhabi Bank have been mandated as active bookrunners. Abu Dhabi Commercial Bank, HSBC, Mizuho and SMBC Nikko are acting as passive bookrunners on the debt offering.

With assistance from Rakteem Katakey.

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