Adnoc’s first bond sale raises $4bn

• Maturities of five, 10 and 30 years
• Fitch rating of AA
• Sale comes as oil price drops

Abu Dhabi’s state oil giant, Adnoc, launched its first-ever bond sale on Wednesday, raising $4 billion through its wholly-owned primary debt-capital market funding vehicle, Adnoc Murban.

The company offered three benchmark-size, dollar-denominated treasuries with maturities of five, 10 and 30 years.

Adnoc sold $1 billion of five-year bonds, $1.5 billion of 10-year bonds and $1.5 billion of 30-year debt, according to reports.

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JP Morgan and Morgan Stanley are the global coordinators. BofA Securities, Citi and First Abu Dhabi Bank are the acting bookrunners. Abu Dhabi Commercial Bank, HSBC, Mizuho and SMBC Nikko act as passive bookrunners.

Adnoc tapped the debt market under the Global Medium Term Note (GMTN) more than two years after it created Adnoc Murban for such financing. 

Fitch rated the GMTN programme AA. According to Fitch, Adnoc could raise up to $10 billion in the next four years.

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The sale came as crude prices took a massive tumble, wiping the year’s gains.

Brent dropped almost 7 percent in a week to around $73 a barrel, while WTI dipped to under $70 a barrel.

Fitch estimates that Murban will have enough cash flow to service the debt it may raise, even under very conservative oil prices: “We estimate that Adnoc Murban will generate enough cash flow even if oil prices fall to $1 a barrel.”

In July Saudi Aramco appointed bankers for a sale of senior unsecured US dollar-denominated bonds. 

Demand for loans from the oil and gas industry fell by 6 percent in 2023 year-on-year, after a fall of 1 percent in 2022.