First Abu Dhabi Bank (FAB), UAE's largest bank and one of the world's largest and strongest financial institutions, recently issued its inaugural USD Tier 2 capital securities.

 

The $1 billion 10.5NC5.5-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.

 

According to FAB, the bond was priced at a spread of UST+170bps, resulting in a yield of 6.32%. This is the tightest spread paid by any bank globally on a callable Tier 2 structure this year.

 

The offering attracted a well-diversified and high-quality order book, with significant participation from key global investors.

 

FAB successfully allocated 79% of the issuance to investors outside the Middle East. Investor demand reached just under $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 $1 billion, surpassing the initially anticipated amount of $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.

 

The top Emirati bank had earlier this year achieved the tightest spread on a Tier 2 issuance globally.

 

FAB also acted as joint lead manager and book-runner on this Tier 2 bond issuance.-TradeArabia News Service