Wednesday 23 May 2018

Emirates NBD launches $750m bond

Dubai, March 26, 2013

Emirates NBD, Dubai's largest lender, priced a $750 million subordinated bond at 4.875 per cent, tighter than initial guidance, a document from lead managers said.

The order books for the issue, aimed at boosting the bank's supplementary capital, stood at $2.8 billion, according to a separate document, circulated prior to final pricing.

The bond has a 10-year lifespan but can be redeemed after five years.

Pricing was tighter than the initial guidance of the low 5 per cent area given earlier in the day. The equivalent spread was 389.8 basis points over midswaps.

The offering is expected to help repay part of the Dh12.6 billion ($3.4 billion) which ENBD received from government in 2008 as part of a wide-ranging support for banks in the UAE during the global financial crisis.

The bank said in January that it was looking to begin repayment of the money, converted into capital boosting bonds in late 2009, as the value of the instruments diminishes and access to finance from the market has become cheaper.

Banks in the UAE will pay 5 per cent on the government bonds this year, before paying 5.25 per cent for the remaining three years of their life.

In February, Abu Dhabi Commercial Bank issued a $750 million 10-year Tier 2 note at 265 basis points over midswaps. Other Abu Dhabi banks have also repaid some or all government funding this year.

ENBD is arranging the bond issue itself along with Citigroup , HSBC, JP Morgan Chase, Societe Generale and Standard Chartered.-Reuters

Tags: Dubai | bond | Emirates NBD |

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