close

policy

We would like to invite you to continue a survey you have started. ...

Do you trust your insurer ?

Strongly agree
Agree
Disagree
Strongly disagree
Insurance provides peace of mind
Insurance is purchased only when compulsory
Terms and Conditions (small print) are clear and easily accessible
Insurance jargon (language) stands in the way of fully understanding each policy
Insurance companies try their best to uphold the details of the policy without cutting corners
Reducing risk, cutting costs and profits are more important to an insurance company than the customer
Insurance companies in the region are as professional as in other more developed markets
Gender
Age group
Do you feel your insurance provider works in your interest?
Have you had a rejected claim that you feel was not justified?
Do you trust your insurance provider?
Our Network

Register for our free newsletter

 
 
Latest News

Mubadala bond trading at tiny premium in grey mkt

Talk of UST+185bps for 5-yr, UST+210 bps for 10-yr tranche; $4 billion order book –analyst; Size expectation between $1.5 bln-$3bln -sources

0

April 13, 2011 3:39 by



A dollar-denominated bond issue by Abu Dhabi investment fund Mubadala, due to price on Wednesday, was trading in the grey market at a premium of between 0.1 and 0.5 cents to the price guidance, traders said.

State-owned Mubadala, which plans to invest $16.3 billion in 2011, is issuing a dual-tranche five-year and 10-year dollar-denominated bond, which the market expects could raise between $1.5 billion and $3 billion.

Price guidance issued on Tuesday indicated the five-year tranche will be priced in the area of 185 basis points over U.S. Treasuries.

For the 10-year tranche, price guidance was seen in the area of 210 basis points over U. S. Treasuries. One Dubai-based trader said the expectation was for pricing on both tranches to tighten 10 basis points upon issue.

“The deal is being priced at a small premium to the already existing Mubadala curve, but if you work on the spreads and possible retightening of the guidance on the 5-year, it will come spot on the curve, leaving no real juice,” said one regional trading source.

Three traders said both tranches of the issue were trading in the grey market at a premium of 0.1 and 0.5 cents to the price guidance.

Mubadala, which has stakes in AMD, General Electric and private equity firm Carlyle concluded roadshows on Tuesday which took in Europe, Asia, the United States and United Arab Emirates.

An issue from oil exporter Abu Dhabi, largely shielded from political unrest in the region and benefiting from rising oil prices, is likely to attract investors — at the right price.

Mubadala would be the second Abu Dhabi entity to tap international capital markets this year after International Petroleum Investment Co (IPIC) issued $4.3 billion equivalent in sterling and euro-denominated bonds last month.

Three sources said market expectations were of a deal size of between $1.5 billion and $3 billion. One analyst note from a regional bank said order books on Wednesday were $4 billion.

“As usual, the 5-year is always more popular with the locals that are always ready to support their market, so this has received the most demand. The risk is that they come with a very large size and tighten the spreads,” the note said.

“Most long-term fundamental investors are preferring to wait on this one given the level of speculative demand on new issues these days and the most recent experience of IPIC.”

Banks arranging the deal are HSBC, Standard Chartered, National Bank of Abu Dhabi, Barclays and Societe Generale (Reporting by Rachna Uppal and Enjy Kiwan; Editing by Susan Fenton)



0

Leave a Comment