Stephen Jordan, NBAD’s Group Treasurer
The National Bank of Abu Dhabi (NBAD) has issued US $465 million senior unsecured convertible bonds, convertible into ordinary shares of NBAD.
The offering, due in 2018, was increased from an initial amount of US $350 million following strong demand from investors during the book-building process.
It may be increased by a further amount of up to US$35 million in the event of exercise in full of the over-allotment option granted by NBAD to the Joint Book-runners, exercisable on or prior to June 3rd, 2013.
The offering received strong investor demand; it was more than three times oversubscribed with a quality order-book in excess of US$1.5 Billon, showing investor demand for NBAD's equity story.
It has a strong distribution across a wide investor base across the UK, France, Germany, Switzerland, and offshore accounts.
“Strong demand from long-only funds allowed us to increase the deal size from US$350 million to US$465 million and price the deal at the tight end of the range,” says Stephen Jordan, the Group Treasurer of NBAD.
“This issuance shows our commitment to further diversify our funding sources and investor base. The proceeds will be used for general corporate purposes,” Mr. Jordan said.
The Bonds will be issued on or around June 5th, 2013 at par and will carry a coupon of 1.00% per annum payable semi-annually in arrear commencing on September 12th, 2013. The initial conversion price has been set at USD 4.2497, representing a premium of 30% above the volume weighted average price of the NBAD Shares between launch and pricing, translated into US dollars at the prevailing USD:AED exchange rate at pricing of USD 1 = AED 3.6730. Unless otherwise redeemed, purchased, converted or cancelled, the bonds will be redeemed at par on maturity on March 12th, 2018, in accordance with the terms and conditions of the bonds.
The offering of bonds follows the authorisation granted by the Extraordinary General Meeting of NBAD held on March 12th, 2013.
The maximum number of NBAD Shares that may be issued upon conversion of the Bonds is 117,655,364 NBAD Shares (assuming the over-allotment option is exercised in full), representing approximately 2.75% of NBAD’s current issued shares outstanding. It is intended that an application will be made following settlement for the Bonds to be included for trading on the Open Market (Freiverkehr) segment of the Frankfurt Stock Exchange.
BofA Merrill Lynch, Barclays and J.P. Morgan Securities plc acted as Joint Global Co-ordinators and Joint Book-runners along with NBAD as Joint Book-runner. J.P. Morgan Securities plc is acted as settlement agent on the offering.
NBAD is rated senior long term/short term A+/A-1 by Standard & Poor's (S&P), Aa3/P1 by Moody’s, AA-/F1+ by Fitch and A+ by Rating and Investment Information Inc (R&I), giving it the strongest combined rating of any Middle Eastern financial institution. Moreover, since 2009, the prestigious Global Finance has rated NBAD in its World’s 50 Safest Banks, and the safest bank in the Middle East.