World News | FAB Issues Largest-ever USD Tier 2 Bond from a UAE Bank
Get latest articles and stories on World at LatestLY. First Abu Dhabi Bank (FAB), UAE's largest bank and one of the world's largest and strongest financial institutions, successfully issued its inaugural USD Tier 2 capital securities on Tuesday, September 26, 2023.
Abu Dhabi [UAE], October 6 (ANI/WAM): First Abu Dhabi Bank (FAB), UAE's largest bank and one of the world's largest and strongest financial institutions, successfully issued its inaugural USD Tier 2 capital securities on Tuesday, September 26, 2023.
The USD 1 billion 10.5 NC5.5-Year Tier 2 Bond is the largest-ever Tier 2 issuance from a UAE bank and the largest-ever Tier 2 conventional bond issuance from a MENA bank.
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The bond was priced at a spread of UST+170bps, resulting in a yield of 6.32 per cent. This is the tightest spread paid by any bank globally on a callable Tier 2 structure in 2023.
The offering attracted a well-diversified and high-quality order book, with significant participation from key global investors.
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FAB successfully allocated 79 per cent of the issuance to investors outside the Middle East. Investor demand reached just under USD 3 billion, marking the largest book size ever achieved by FAB for any of its issuances to date.
Despite volatile market conditions, FAB was able to tighten pricing by 30 basis points and increase the deal size to USD 1 billion, surpassing the initially anticipated amount of USD 750 million. This was due to FAB's strong credit standing and the robust macroeconomic fundamentals of the UAE. Over 228 investors participated in the transaction, including numerous prominent global asset managers. FAB achieved the tightest spread on a Tier 2 issuance globally in 2023.
FAB also acted as joint lead manager and book-runner on this Tier 2 bond issuance. (ANI/WAM)
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