Abu Dhabi sovereign wealth fund ADQ attracted strong appetite for its inaugural dollar-denominated bond sale, to be sold in two tranches, allowing it to tighten price guidance ahead of the launch.

Formally known as Abu Dhabi Developmental Holding Co, ADQ is pursuing a debt sale to help diversify its funding sources for future acquisitions, a person familiar with the matter told Reuters on Monday.

Amid order books of almost $10 billion at around 1300 GMT, price guidance for the five-year tranche was given at 85/90 basis points (bps) over U.S. Treasuries and at 95/100 bps over U.S. Treasuries for the 10-year portion, capital markets publication IFR reported, tighter than initial estimates.

ADQ is fully owned by the Abu Dhabi government, which holds more than 90% of the Gulf state's oil reserves, and which last week returned to global debt markets for the first time in three years with a $5 billion bond sale.

The fund has received capital of 287 billion dirhams ($78.15 billion) from Abu Dhabi government, mainly in the form of ownership interests in companies and loan assets, and 144 billion ($39.21 billion) dirhams in funding for equity investments, according to a bond prospectus.

"Abu Dhabi's ambition clearly is to foster a more diverse corporate/quasi-sovereign sector and we should expect more issuance out of the complex in association with that," Morgan Stanley wrote in a note Tuesday.

"ADQ ... holds stakes in some of the entities that traditionally have played sizeable roles in the emirate while also embarking on a larger acquisition spree over the past years," the note said.

Citigroup, Credit Agricole, First Abu Dhabi Bank, Goldman Sachs International, HSBC and Standard Chartered are mandated joint global coordinators and active bookrunners on the ADQ bond.

($1 = 3.6723 UAE dirham)

(Reporting by Rachna Uppal and Mohammad Edrees; Additional reporting by Marc Jones in London; Editing by Kim Coghill and David Evans)