UAE to seek sovereign rating after debt law is approved

The United Arab Emirates will seek a sovereign credit rating and tap the bond market following the approval of a federal debt law, Finance Ministry undersecretary Younis Al Khoori told Bloomberg.

The UAE is aiming to finalize the law – which has been under discussion for several years – by the end of 2016, Al Khoori said.

“We are still discussing it with the central bank. There is one remaining article under discussion about debt ceiling and debt servicing. Once we have a rating, there will be an issuance,” he said.

In the absence of the debt law, sovereign bond sales in the country are restricted to the governments of the seven emirates.

Earlier this year, Al Khoori said the UAE central bank may issue up to AED 100 billion ($27.2 billion) in bonds once the law is approved.

GCC nations are increasingly looking to tap into the bond market to fund growing budget deficits after the fall in oil prices. Abu Dhabi raised $5 billion in April this year, while Qatar earned $9 billion in the Middle East’s biggest bond sale.