Mashreqbank has appointed JP Morgan and UBS to arrange a subordinated debt issue to boost its tier II capital base. Roadshows are due to begin on 11 January and will travel to Europe and Asia. In common with other such issues, the notes will have a tenor of 10 years,

callable in five.

No size has been specified

for the issue, but it is expected to be in line with previous ones from the bank.

‘Given Mashreqbank’s track record in international bond markets, it is unlikely to exceed $300 million,’ says an international banker. The notes have been rated A3 by Moody’s Investors Service. The senior debt is rated A2.

Mashreqbank was one of the first Gulf banks to tap international bond markets under a $2,000 million euro medium-term note (EMTN) programme and last issued senior debt in April, when a five-year $300 million issue was priced at 40 basis points (MEED 21:4:06).

Subordinated debt issues

are likely to feature strongly in GCC banks’ ventures into the international capital markets in 2007, as a means of boosting capital without diluting shareholders’ equity.