19 September 2005
Earlier today the Abu Dhabi Commercial Bank ("ADCB") issued its debut international bond. This historic transaction is the first international bond issue by an Abu Dhabi based financial Institution and the largest issued from the region to date. The size of the bond is US$ 800million, and it is structured as a floating rate note that will mature in 5 years time.
The bond is the inaugural issue under the bank's new $2.5bn Euro Medium Term Note ("EMTN") Programme. The Joint Lead Manager's of the bond issue are BNP Paribas and HSBC. HSBC also acted as rating advisor to the bank and arranger of the EMTN Programme.
Ahead of issuance a senior level delegation representing ADCB, one of the leading UAE banks, undertook a roadshow that visited major financial centres in Asia, Europe and the Middle East. The response was very positive across the board, with investors attracted to Abu Dhabi and by the credit specifics of ADCB itself. The key messages that were presented to investors were ADCB's strong creditworthiness, 65% ownership by the Government of Abu Dhabi (with an aggregate 79% shareholding directly and indirectly held by the government), excellent credit ratings including a recent upgrade to Aa3 Moody's, A- Standard and Poor's and the proactive turnaround in ADCB's recent financial performance. The combination of these factors enabled the bond to be priced at US$ LIBOR +39 bps setting a new regional benchmark.
When the order book was closed prior to pricing and launch of the bond, its total size was in excess of US$ 1bn. Investors came predominantly from Asia and Europe, with 44% placed in Europe, 29% in Asia and 27% in the Middle East. Investors included banks, fund managers, private banks and corporates.
Eirvin Knox, Chief Executive Officer, ADCB said "it is gratifying to see the strong response to the debut issue of a floating rate note for ADCB. With orders of over U.S. $1 billion and a final size of U.S. $800 million, this is the largest transaction of this type done it the region and was completed at the lowest pricing ever achieved for a five year issue". Knox went on to say "the rating of Moody's of AA3, the highest for a bank in the Middle East, is also recognition of the transformation that has taken place at ADCB in the last two years".
Saeed Al Hajeri, Chairman of ADCB, commented that "the strong position of Abu Dhabi in the UAE and regional economy combined with the strong support of ADCB by the Government of Abu Dhabi are key factors in the outstanding response to the inaugural bond issue of ADCB". He went on to say that "the turnaround in the performance has been achieved by the close working relationship of the board and management of ADCB to create one of the strongest and best performing banks in the region. This is a new era of transparency and market driven forces in Abu Dhabi under the dynamic leadership of the country".
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