Falling oil price forces Abu Dhabi's hand.

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Abu Dhabi expects to post a wider budget deficit of Dhs 36.9bn ($10.1bn) in 2016 because of low oil prices, and plans to cover the gap mainly with international bond issues, a prospectus for a bond sale by the emirate showed. Abu Dhabi, the largest and wealthiest member of the United Arab Emirates, has been meeting investors to discuss a potential benchmark-sized United States dollar bond issue, which would mark its return to international debt markets after an absence of seven years. The government is likely to issue bonds as early as this week with tenors of five, 10 and/or 30 years, two potential investors told Gulf Business. Benchmark size means at least $500m.

Last year, Abu Dhabi posted a budget deficit of Dhs 32.4bn, or 3.9 per cent of its gross domestic product, the government said in the prospectus, which was filed on the London Stock Exchange. The gap was funded from cash reserves, it said. "The budgeted deficit in 2016 is expected to be financed principally by the issue of...

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