Abu Dhabi witnessed the largest easing of sovereign debt risk in the world during the third quarter, according to data tracked by Credit Market Analysis (CMA).

Abu Dhabi, Morocco, Bahrain, Saudi Arabia and Bulgaria saw the best performance in easing of risk easing during the quarter. Greece, China, Japan, Spain and Italy were the worst five performers during the period.

Dubai is also among the leaders of the best performers list as its credit default swap (CDS) fell more than 44 per cent during the quarter, thus proving that the perception of Dubai's risk has fallen considerably during this period.

While Dubai's CDS was at 563.29 bps, the highest point in the quarter, on July 9, the lowest CDS was recorded on September 24, when the CDS fell to 292.9 bps.

While Abu Dhabi's five-year CDS Mid has fallen 60 per cent from 246.3 bps to 98.6 bps between July 1 and September end, that of Morocco tightened by 52.3 per cent, followed by Bahrain and Saudi Arabia which experienced a tightening of 51.3 per cent and 50.9 per cent respectively.

However, Dubai still figures on the list of the seven riskiest sovereign debts, with Ukraine topping the list as the riskiest sovereign debt, according to risks tracked by CMA. While Norway has been judged by CMA the safest sovereign debt, Finland, United States and Germany take the second, third and fourth spots on the list of safest sovereign debts.

The easing of the risk perception in GCC economies, especially Abu Dhabi and Dubai, is evident from the activities in their debt capital markets.

Abu Dhabi has seen a series of bond issues in the past few months as big names such as Aldar, Taqa, Tourism and Investment Development Company, National Bank of Abu Dhabi and ADCB successfully concluded their bond issue.

Both NBAD and ADCB have been able to raise medium-term funds from the international debt markets at coupons of around five per cent at a time when the deposit rates are still said to be hovering around six per cent.