Abu Dhabi Commercial Bank completes $1bn bond

04 October 2009

Success of bank’s bond paves the way for future issues

Abu Dhabi Commercial Bank (ADCB) has completed the issue of a $1bn bond at a rate of 262.5 basis points above US treasuries with a tenor of five years. Bankers say that further issues by Abu Dhabi companies are now being worked on.

The ADCB deal was arranged by the UK’s HSBC and Standard Chartered, Bank of America Merrill Lynch, Germany’s Deutsche Bank and Commerzbank, France’s BNP Paribas, and ADCB.

Sources in the bond market say that several other sukuk issues from Abu Dhabi government-related companies are due to be issued before the end of the year, including at least one sukuk which will be issued in October. “The ADCB investor roadshow went extremely well and showed the continued appetite for Middle East issuance. There are a few more deals in the pipeline before the end of the year,” says a source in the capital markets.

ADCB began meeting investors in late September to gauge interest in the transaction. The bond will mature on 8 October 2014. ADCB is the second regional bank to access the bond markets this year, after National Bank of Abu Dhabi (NBAD) raised $850m from the capital markets in September. The NBAD issue was priced at 228 basis points above US treasuries (MEED 27:9:09).

ADCB disclosed in its prospectus for the bond issue that it had $609m of exposure to Saudi Arabia’s Saad Group and Ahmad Hamad al-Gosaibi & Brothers, which are currently in default on their debts.

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