National Bank of Abu Dhabi (NBAD), Abu Dhabi’s biggest lender by assets said yesterday it has issued $465 million senior unsecured convertible bonds, convertible into ordinary shares of NBAD. The issue was more than three times oversubscribed.
“The offering, due in 2018, was increased from an initial amount of $350 million following strong demand from investors during the book-building process,” NBAD said in a statement.
The bank said the bonds will be issued on or around June 5, 2013 at par and will carry a coupon of 1.00 per cent per annum, payable semi-annually in arrear commencing on September 12, 2013.
“The initial conversion price has been set at $4.2497, representing a premium of 30 per cent above the volume weighted average price of the NBAD shares between launch and pricing, translated into US dollars at the prevailing Dollar:AED exchange rate at pricing of $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,” said NBAD.
NBAD also said the offering may be increased by “a further amount of up to $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 3, 2013.”
The offering has a strong distribution across a wide investor base across the UK, France, Germany, Switzerland, and offshore accounts, the bank added.
“Strong demand from long-only funds allowed us to increase the deal size from $350 million to $465 million and price the deal at the tight end of the range,” said Stephen Jordan, 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,” Jordan added.
NBAD’s stock ended 1.63 per cent lower on Thursday, closing at Dh12.05 on the Abu Dhabi Securities Exchange.
Last month, NBAD said its fiscal first quarter net profit rose 35.5 per cent on year to Dh1.41 billion. The growth in the quarter was due primarily to higher investment, fee and net interest income, the bank said at the time.