National Bank of Abu Dhabi (“NBAD”), rated A1 by Moody’s, A by both S&P and Fitch, has successfully launched its inaugural transaction under its newly signed U.S.$5 billion medium term fund raising programme (Euro Medium Term Note “EMTN”). NBAD has the highest combined credit ratings in the Middle East.
Building on NBAD’s improving credit story, lead managers Barclays Capital and Credit Suisse First Boston launched NBAD’s inaugural transaction in the international Debt Capital Market by issuing a 5-year, US$850 million Floating Rate Notes (“FRN”), rated Aa3/A/A by Moody’s/S&P/Fitch respectively.
The FRN was priced with a coupon of 3-month U.S. $ Libor + 30bp and an issue price of 99.91%, resulting in a yield to investors of 3-month US $ Libor + 32bp. The transaction settles on 14th December 2005 and the maturity date of the notes is 14th December 2010. NBAD’s choice of a 5-year maturity was in line with general investor preferences and provides the market with a new liquid benchmark.
The issuer conducted extensive Roadshows throughout the 3 main regions of demand - GCC, Asia and Europe. NBAD’s senior management presented the bank’s credit story extremely well during the investor meetings and group presentations which were incredibly well received.
The marketing strategy resulted in an order book that was 1.3 times oversubscribed. The issue was diversely distributed with Europe accounting for 41.8% of demand (including 11.7% for the UK), the GCC 34.5%, Asia 10.2% and others 13.5%. The order book comprised of 55 initial orders, and 47 accounts participated in the transaction. The investor base for the transaction was well diversified and included banks, funds, asset managers, corporations, insurers and government agencies.
The deal represents the largest new issue transaction at launch from a Financial Institution (“FI”) in the Middle East and at 3-month US $ LIBOR +32bp, is the tightest pricing achieved by any FI from the region for a transaction with this maturity. The deal boasted a quality order book with over 65% of bonds successfully placed outside the Gulf.
NBAD successfully achieved all of its debut issue objectives of establishing a competitively priced liquid benchmark and a new pricing reference for GCC financial institutions, diversification of the investor base, and the lengthening of the average maturity of its funding.
