National Bank of Fujairah PJSC Prices US$ 350 Million 5.875% Additional Tier 1 Capital Securities Issuance

National Bank of Fujairah PJSC (“NBF”) successfully raised US$350 million worth of Additional Tier 1 capital through a perpetual non-call 5-year bond with a coupon of 5.875%. The landmark issuance, which marks NBF’s debut offering in the international capital markets, complies with the Basel III regulatory framework published by the Central Bank of UAE in March 2018.

On Monday 16th September 2019, NBF announced a comprehensive global roadshow covering key fixed income investor locations in Hong Kong, Singapore, Dubai, Abu Dhabi and London, with a potential benchmark fixed rate resettable USD Regulation S Additional Tier 1 perpetual non-call five year unrated capital securities offering to follow.

Following the completion of the roadshow, and on the back of strong feedback received from global investors coupled with supportive market conditions, NBF released initial price thoughts of ‘low to mid 6%’ at GCC open on the 24th of September 2019. The order book grew steadily with strong bids from global investors. The robust momentum allowed the Bank to ultimately launch and price a US$ 350 million Additional Tier 1 bond at an interest rate of 5.875% (which translates to a Margin of 430.1 bps over the 5-year US Treasury) following one iteration to the initial price indication. The final pricing was circa 62.5bps inside the wider end of the initial price reflecting strong investor interest. In addition, the transaction attracted strong demand with the order book closing in excess of USD 1.5bn, which is more than four times oversubscribed.

Vince Cook, Chief Executive Officer of NBF, commented “We are very pleased to see such a strong reception for our inaugural public issuance and are very encouraged by the robust demand from international and regional investors. This is a testament to our unique credit story, and focused business strategy.”

The final order book, which was in excess of US$ 1.5 billion, was allocated to investors across the Middle East (58%), Asia (22%), Europe (10%) and UK (10%). In addition, the types of investing entities were well balanced with Banks (38%), Private Banks (28%), Fund Managers (32%) and Other (2%) investors all participating.

The purpose of the Additional Tier 1 issuance is to strengthen and optimise NBF’s capital base, to boost the Tier 1 and Capital ratio and to diversify the bank’s capital and investor base.

HSBC Bank plc acted as a Structuring Agent on the offering and Emirates NBD Capital, First Abu Dhabi Bank, HSBC, J.P. Morgan and Standard Chartered Bank acted as Joint Lead Managers and Bookrunners