|16 February, 2020

FAB issues bonds valued at over $860mln within 3 days

The bank also raised AU$350mln through a Kangaroo issuance.

Image for illustrative purposes. First Abu Dhabi Bank head office situated at Khalifa Business Park Abu Dhabi.

Image for illustrative purposes. First Abu Dhabi Bank head office situated at Khalifa Business Park Abu Dhabi.

First Abu Dhabi Bank/ Handout via Thomson Reuters Zawya

ABU DHABI- First Abu Dhabi Bank, FAB, has issued bonds worth over AED3 billion via two separate public issuances in three days, marking its first ever Sterling bond and first Kangaroo bond since 2014.

FAB issued its inaugural three-year GBP450 million (AED2.15 billion) fixed rate bond, under its US$15 billion Euro Medium Term Note, EMTN, Programme. According to a statement released by the UAE's largest bank, "This marks the first and largest ever Financial Institution GBP issuance from the region."

"The book was 2.8 times oversubscribed with strong participation from high quality UK investors," it added, noting that the bond will be listed on the London Stock Exchange.

The bank also raised AU$350 million (AED860 million) through a Kangaroo issuance. The five-year floating-rate notes were priced at 110 basis points over the three-month bank bill swap rate, BBSW, and issued under its AU$2 billion Debt Issuance Programme. This marks FAB’s return to the Australian dollar market for the first time since 2014.

The bond will be listed on the Australian Stock Exchange. Commenting on the results, Andre Sayegh, FAB's Deputy Group CEO and Group Head of Corporate and Investment Banking, said, "FAB’s ability to tap both the UK and Australian markets in the same week underlines the success of FAB’s funding strategy, with our first Sterling bond representing another significant milestone for the bank." "Both transactions are consistent with our strategy to diversify our investor base whilst raising cost-effective liquidity and funding," he continued, adding that, "The strong levels of demand demonstrate the trust and confidence that global investors place in FAB, which is underpinned by our solid fundamentals, diversified funding base, robust liquidity, and market-leading credit profile and ratings." January saw FAB issue the region’s first dollar-denominated Sukuk of 2020, a US$500 million RegS Sukuk under its US$3.5 billion Trust Certificate Issuance Programme.

The five-year Sukuk was priced at 90 basis points over mid-swaps and is listed on the London Stock Exchange.

This is the lowest profit rate and credit spread achieved on any of FAB’s previously issued Sukuk, demonstrating the bank’s well-established investor base and recognition in the market. The orderbook topped US$1 billion with 80 percent allocated to Islamic investors which is materially higher than the average seen in regional Sukuk deals. FAB is rated Aa3/AA-/AA- by Moody’s, S&P and Fitch, respectively, the strongest combined credit ratings of any other bank in the MENA region.

© Copyright Emirates News Agency (WAM) 2020.

More From Markets