National Bank of Abu Dhabi (NBAD) has successfully launched a USD 5-year transaction under its recently updated US$5 billion EMTN Programme with Barclays Capital, BNP Paribas, National Bank of Abu Dhabi and the Royal Bank of Scotland plc as joint-bookrunners.
NBAD enjoys one of the highest credit ratings assigned to a Middle Eastern bank and is ranked amongst the world's safest banks by Global Finance.
This transaction represents the first US$ international public benchmark transaction by a GCC Financial Institution since 2007. Bookbuilding began on Wednesday 2 September in the London afternoon with a whisper of ms+190-210bps range. The orderbook attracted phenomenal demand with over US$ 2bn already accumulated prior to release of price guidance.
Official price guidance was released at 9:30am London time on 3 September at the m/s+190-200bps range while the book continued to grow, finally reaching over US$ 4bn and allowing NBAD to price a US$ 850 million transaction at the tight end of the guidance. The 5 year bond was priced at 99.717 with a 4.5% semi annual fixed coupon to yield 190bps over m/s and 228bps over US Treasury respectively.
The success of NBAD's transaction was underpinned by the international marketing strategy undertaken in the UAE, Europe, and Asia. NBAD fielded 2 teams including the most senior management officials to cover all regions in a short timeframe. NBAD's consistent profitability and positioning as the Banker to the Abu Dhabi Government who owns 70% of the institution, appealed to a diverse and high-quality investor base.
The transaction orderbook was over 4.8x oversubscribed with 284 orders. Investor distribution was diversified with 71% of the paper placed outside the MENA region. NBAD achieved a high quality orderbook with the vast majority allocated to real money accounts.
NBAD successfully established a competitively priced liquid benchmark and a new pricing reference for GCC financial institutions, diversifying its investor base, and lengthening the average maturity of its funding.
"I am delighted by this overwhelming interest expressed by the international investor community in the Abu Dhabi 2030 vision and in our bank," said Michael Tomalin, NBAD Group Chief Executive, who led the marketing effort across Europe.
"The success of our transaction confirms that financial institutions with an excellent business model, a clear strategy and a solid franchise from our region do have access to the international capital markets," he added
"We capitalised fully on the increased awareness of the Abu Dhabi credit story, which was generated by the huge success the sovereign issues achieved, to establish, what we believe will be the new FI benchmark and open the door for many financial institutions from our part of the world," said Mahmood Al Aradi, Senior General Manager, Financial Market Division at NBAD, who led the second team in their meetings in the UAE and Asia.
BY JAMAL AL MAJAIDA , September, 06th 2009
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