First Abu Dhabi Bank sells $500mln sukuk

The five-year paper offers an initial price guidance of 100-105 basis points over mid-swaps

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

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

First Abu Dhabi Bank / Handout via Zawya

DUBAI  - First Abu Dhabi Bank, the largest lender in the United Arab Emirates, sold sukuk, or Islamic bonds, worth $500 million on Thursday, as Gulf issuers start tapping debt investors in what is likely to be another record year for regional bonds.

According to a document issued by one of the banks leading the deal and seen by Reuters, the five-year paper offers investors a profit rate equivalent to 90 basis points over mid-swaps.

It was marketed earlier on Thursday with an initial price guidance of 100-105 basis points over mid-swaps.

The issuance, which will be completed later on Thursday, comes on the heels of a $750 million bond sale by rival Emirates NBD, Dubai's largest bank, on Wednesday - the first public debt issuance from the Gulf region this year.

Banks, corporates and governments in the oil-rich Gulf region are expected to rely heavily on debt financing this year after the coronavirus crisis and lower energy prices squeezed their finances.

The Gulf saw a second consecutive year of record international bonds last year, topping $100 billion, and is likely to notch up another record this year, bankers and analysts have said. 

(Reporting by Davide Barbuscia; Editing by Jan Harvey) ((Davide.Barbuscia@thomsonreuters.com; +971522604297; Reuters Messaging: davide.barbuscia.reuters.com@reuters.net))

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