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Abu Dhabi’s ADCB eyes Benchmark bond in H1 2012

New bond an option to meet upcoming debt maturities; ADCB has $1.5 bln loan maturing March 2012; Bank has "minimal" exposure to Europe

November 22, 2011 2:18 by

Abu Dhabi Commercial Bank plans to issue another benchmark-sized bond in the first half of next year, its chief financial officer said on Tuesday, as one option to meet debt maturities.

“We have upcoming maturities in this quarter and the next. So we are always looking at options,” Deepak Khullar told reporters on the sidelines of a conference.

“We expect to come to the market again by the first half of next year. It will likely be a benchmark offering.”

Benchmark-sized deals are normally at least $500 million.

Khullar did not provide details of which currency the potential bond could be issued in or any other terms. He said that ADCB has 3.5 billion UAE dirhams ($952.89 million) of maturities mostly in the first quarter of next year, adding a portion of the proceeds from its recent bond sale would be used to refinance debt.

Last week, ADCB issued a $500 million Islamic bond which received nearly $1.4 billion in orders, signalling hefty appetite despite choppy global markets.

Among upcoming repayments, the bank has a $1.5 billion syndicated loan maturing in March, according to Thomson Reuters data.

Khullar said the lender’s exposure to Europe is minimal.

“About 96 percent of our loan book is in the UAE. So we have minimal exposure to Europe.”

He added that although 2012 will be a tough year for UAE banks, provisioning for bad loans is likely to drop.

“Every bank has its own provisioning coming down but it’s hard to predict the corporate book. I don’t expect overall provisions for next year will be significantly higher.” ($1 = 3.6730 UAE dirhams) (Reporting by Dinesh Nair; Writing by Rachna Uppal; Editing by Amran Abocar)

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