DUBAI: Emirates NBD, Dubai’s biggest lender by market value, raised $1bn from a capital-boosting bond yesterday, amid healthy demand for the deal.
Proceeds from the Tier 1 bond issue are expected to shore up the bank’s core capital as defined under the Basel banking industry rules, and a key measure of its financial strength.
Banks in the Gulf Arab region are taking advantage of ample liquidity in debt markets to shore up their capital ratios at current cheap borrowing rates. ENBD’s Tier 1 solvency ratio stood at 13.5 percent of assets at the end of March.
The perpetual bond, meaning it has no fixed maturity date but cannot be redeemed before six years at least, priced at an interest rate of 5.75 percent, arranging banks said. The deal attracted orders of more than $4.25bn ahead of launch, signalling strong investor appetite for the credit, rated A+ by Fitch, and the yield on offer amid the current low yields across emerging markets.
Reuters
