Saturday, Feb 22, 2020
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First Abu Dhabi Bank sells sterling-denominated bonds worth $584 mn

First Abu Dhabi Bank bonds
FAB’s issuance becomes the Middle East’s largest sterling-denominated bond in ten years

First Abu Dhabi Bank has (FAB) sold $584 million worth of three-year sterling-denominated bonds at a yield premium of 98 basis points this week over UK gilts, according to media reports. With that, First Abu Dhabi Bank’s bond issuance becomes the Middle East’s largest sterling-denominated bond in ten years. 

First Abu Dhabi Bank hired leading financial advisors such as Barclays, HSBC and Nomura to lead the bond issuance. The bonds issuance is under First Abu Dhabi Bank’s $15 billion euro medium-term note programme. 

In fact, the deal has reported to have lured nearly GBP 1.25 billion of orders in London by midday. Last month, First Abu Dhabi Bank also issued Islamic bonds or sukuks worth $500 million. 

In the Middle East, Boubyan Bank had issued $750 million in five-year sukuk, while Riyad Bank plans to issue a dollar-denominated sukuk. Emirates NBD also issued bonds worth $500 million this month.

Syed Yahya Sultan, head of fixed income strategy at Emirates NBD, said that, Emirates NBD and Boubyan have priced record-low yields on their five-year bonds and these are levels lower than US Treasuries at the same time last year.” 

Last month, Abu Dhabi Bank  sold sukuks worth $500 million, with a profit rate equal to 90 basis points, media reports said. Earlier this month, Abu Dhabi was in talks with banks to take a proactive approach to debt financing. 

Currently, Abu Dhabi has one of the best credit ratings in the region. It is rated AA by S&P and Fitch and Aa2 by Moody’s. It appears that the Abu Dhabi Department of Finance frequently assesses options under the existing bond issuance programme. 

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