The US multinational investment bank Morgan Stanley said Monday that the governments of the United Arab Emirates and related entities have issued $ 24.5 billion in debt that qualifies on the JPMorgan emerging market bond index, making it the largest by a wide margin among the sovereign debt listed on the index.
The governments of Abu Dhabi, Dubai and Sharjah have raised $ 19 billion this year through the issuance of international bonds, as they seek to bolster financial conditions affected by the double whammy of the Coronavirus pandemic and the decline in oil prices.
DP World, which specializes in operating ports, raised $ 1.5 billion, while the Abu Dhabi government’s Mubadala Fund raised $ 4.5 billion this year.
Morgan Stanley said in a report that the Mubadala Fund could hit the market again due to the maturity of $ 3.8 billion in international bonds before April 2021.
The investment bank added that the eligible debts on the index issued by governments and companies in the UAE exceeded by a large margin several governments, such as Indonesia, which issued debts worth $ 16.3 billion, and Mexico, with debts amounting to $ 14.5 billion.
The inclusion of a $ 1 billion 30-year bond issued by Dubai recently, and the sale of $ 5 billion in debt by Abu Dhabi, will add to the weight of the index among the top five.
Morgan Stanley said Dubai's debt was being understated somewhat.
A recent bond issuance prospectus set direct government debt to Dubai at around $ 34 billion as of the end of June, but it did not include any estimates of the total debt owed by government-related entities, nor did it include the overdraft facility from local banks.