The National Bank of Abu Dhabi ("NBAD") successfully launched a USD five-year transaction under its US$5 billion EMTN Programme. Bank of America Merrill Lynch, Barclays Capital, HSBC and National Bank of Abu Dhabi acted as joint-bookrunners in the notes, which represents the first international public benchmark transaction by a GCC Financial Institution in 2010.
Official price guidance of midswaps plus 180bp area was released on Thursday 18 March 2010 at 7:30am London time. The strong demand in the orderbook allowed NBAD to price the US$ 750 million notes at a spread of midswaps plus 178 bps, inside the initial guidance.
The success of NBAD's deal was underpinned by the international marketing strategy undertaken in London and Switzerland. NBAD fielded one team including senior management officials to cover key centres as well as conducting conference calls with Asian and European investors in a very short timeframe.
NBAD's position as the Banker to the Abu Dhabi Government with 70.48% ownership by the Government of Abu Dhabi through Abu Dhabi Investment Council (ADIC), and consistent profitability and value creation to shareholders, appealed to a diverse and high-quality investor base. The transaction will allow NBAD to diversify its investor base, and lengthen the average maturity of its funding.
NBAD's high quality orderbook was just over 5 times oversubscribed with in excess of 250 orders. Investor distribution was diversified with 20% Asia, 50% Europe , 27% Middle East and 3% US offshore.
"I am delighted by this overwhelming interest expressed by the international investor community in Abu Dhabi and our Bank," said Michael Tomalin, NBAD Group Chief Executive. "The success of our transaction confirms that financial institutions with excellent business model, clear strategy and a solid profile from our region do have access to the international capital markets," he added.
Mahmood Al Aradi, Senior General Manager, Financial Markets Division at NBAD, said: "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."
Last Year, NBAD successfully launched a US$850 million 5-year Medium Term Note under (EMTN) programme, which represented the first US dollar-denominated international public transaction by a GCC Financial Institution since 2007. The issue successfully established a benchmark and a new pricing reference for GCC financial institutions and diversified its investor base. The transaction book order was 4.8 times oversubscribed with a broad global range of investors. The issue won the Deal of the Year Award from EuroWeek.
NBAD has the highest combined credit ratings assigned to a Middle Eastern bank and is ranked amongst the world’s 50 safest banks by Global Finance.