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Dubai’s Emirates NBD Hires Banks For Swiss Franc Bond – Sources
ENBD appoints Credit Suisse and BNP Paribas as arrangers; Sale depends on market conditions.
February 18, 2012 12:28 by Reuters
Emirates NBD, Dubai’s largest bank, is planning to issue a Swiss franc-denominated bond and has appointed two banks to look at the sale, banking sources said on Thursday.
One of the sources said the banks appointed are Credit Suisse and BNP Paribas.
“The two arrangers are appointed to assess the market, depending on the market conditions, the sale will be decided,” he said.
Emirates NBD has just over 8 billion dirhams in debt maturing this year, including a $1.5 billion loan due in October.
On Wednesday the bank reported a sharp fall in profits for the second quarter in a row on provisioning for bad loans.
Its Islamic subsidiary, Emirates Islamic Bank, re-opened Gulf bond markets this year with a $500 million Islamic bond, or sukuk, in January, which carried a profit rate of 4.72 percent.
In 2007 Emirates NBD completed a 100 million-Swiss franc three-year guaranteed floating rate bond which paid 7 basis points over three-month Swiss Libor, according to Thomson Reuters data. Under the terms of a guaranteed bond, the principal and interest is paid by someone other than the issuer.
In the last two years other Gulf banks have sought to take advantage of a favourable swap rate between the Swiss franc and U.S dollar, the currency most Gulf currencies are pegged to.
Commercial Bank of Qatar, Abu Dhabi Commercial Bank and First Gulf Bank have all tapped Swiss liquidity since 2010. (Additional Reporting by David French and Mirna Sleiman; Editing by Greg Mahlich)
By Stanley Carvalho