Abu Dhabi government’s oil and gas invest arm International Petroleum Investment Company (IPIC) has working with a group of nine banks for a euro-denominated bond issue.

The bond is unlikely to be issued in the immediate future due to IPIC’s row with debt-laden Malaysian state investment fund 1MDB, news agency Reuters cited unnamed sources as saying. IPIC is involved in a dispute with its former partner over debt obligations, to whom it had provided cash in exchange for assets.

IPIC has selected the lenders, which had provided its subsidiary Aabar Investments a €3.6bn ($4.1bn) loan in March. Bank of America-Merrill Lynch, BNP Paribas, HSBC, Intesa Sanpaolo, JP Morgan, National Bank of Abu Dhabi, Natixis, Societe Generale and Sumitomo Mitsui Banking Corporation were involved in that transaction.

IPIC plans to use the proceeds from the euro bond to refinance its existing debt. The company has a €1.25bn bond maturing in May, however, it is likely to use other sources of funding such as existing cash reserves to pay the bondholders. “Having answers to all the questions stemming from 1MDB will be important for securing investor support,” the news agency cited one of the sources as saying.

Abu Dhabi state entities are lining up to sell bonds after the government’s successful $5bn deal last month – its first international debt sale in seven years.

Mubadala Development Company, another Abu Dhabi-government owned investment vehicle sold a $500m seven-year bond this week, while banks were due to respond last to Abu Dhabi National Energy Company (Taqa), which had invited them to pitch for arranger roles on a potential bond offering.