Abu Dhabi Commercial Bank moves ahead with bond sale

27 September 2009

Second Abu Dhabi-based bank to approach capital markets for bond funding

Abu Dhabi Commercial Bank (ADCB) is working on the sale of around $1bn of bonds after completing a roadshow visiting international bond investors, according to bankers close to the deal.

The bank could complete the sale by the beginning of October. “There is continued appetite for Middle East bonds, and ADCB has attracted a lot of interest,” says a banker close to the deal.

ADCB, the US’ Merrill Lynch, Germany’s Deutsche Bank and the UK’s Standard Chartered are acting as arrangers on the deal. In the prospectus for the bond issue the bank revealed that it had a total of $609m of exposure to troubled Saudi conglomerates Saad group and Ahmad Hamad al-Gosaibi & Brothers.

Banks in the UAE have increased their provisions by 44 per cent in August from the same time last year as a result of the slowdown in the economy and an increasing number of defaults on loans. According to the latest data from the Central Bank of the UAE banks increased their provisions for non performing loans to AED26.3bn ($7.2bn) at the end of August 2009, from AED18.3bn at the end of August 2008.

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