On the 29th of July, 2005, Union National Bank ("UNB") issued its debut international bond. The size of the bond was US$ 400 million, and it was structured as a floating rate note that will mature in 5 years. The bond was the inaugural issue under the bank's new US$ 1.5 billion Euro Medium Term Note ("EMTN") Programme and is listed in Luxembourg. The Joint Lead Manager's of the bond issue were Citigroup and HSBC. Both also acted as Joint Bookrunner and Arrangers of the EMTN Programme.
Ahead of issuance a senior level delegation representing UNB, undertook a roadshow that visited major financial centres in Asia, Europe and the Middle East - the response was extremely positive across the board. Investors were attracted by UNB’s strong credit fundamentals, (given the robust financial performance over the recent years), its Shareholder structure (50% owned directly and indirectly by the Government of Abu Dhabi and 10% by the Government of Dubai - the only bank in the UAE to be partly owned by both Emirates), and its strong credit ratings (A1 Moody's, A- Fitch). The combination of these factors enabled the bond to be launched with an interest coupon of US$ LIBOR + 0.35 % per annum.
UNB was initially looking for a smaller amount however due to very high demand the deal was closed at US$ 400 million after scaling back the investors’ orders significantly. The strength of the order book allowed pricing to be achieved at the tight end of the guidance range. Investors came predominantly from Asia and Europe with 75% of the bonds being placed outside the Middle East. The investor base was well diversified, comprising banks, fund managers, private banks and corporates.
Mohammad Nasr Abdeen, Chief Executive Officer said, that the Bank was very pleased with the success of its debut benchmark issue. He stated that this success provided the comfort that the strategies pursed by the bank over the recent past were achieving the desired results and were being recognized internationally. He also appreciated the roles played by the Arrangers in bringing a quality deal to the market.
An official from the Bookrunners said, "The transaction achieved an impressive result for the bank in terms of pricing and has performed well in the secondary market, thus achieving UNB's objectives of establishing a strong benchmark and developing an investor base for future access"
