Commercial Bank of Dubai plans first bond issue
Dubai, May 6, 2013
Commercial Bank of Dubai (CBD) plans to tap international debt markets for its first dollar-denominated bond, taking advantage of attractive pricing on the back of returning investor confidence in the emirate.
Gulf banks have stepped up bond sales this year, tapping into substantial investor appetite for bonds issued by regional financial institutions, with over $5 billion of dollar-denominated bonds issued so far this year.
Total year-to-date issuance of dollar bonds in the Gulf is nearly $12 billion.
CBD, rated A- by Fitch, has mandated Citigroup, HSBC Holdings and National Bank of Abu Dhabi to conduct investor meetings which begin on May 9, ahead of the bond sale, it said in a statement on Monday.
A possible benchmark-sized bond may follow, subject to market conditions. Benchmark-sized bond issues are typically at least $500 million in size.
The programme will help the bank to capitalise on business opportunities and will enable it to benefit from an improving economic cycle in the UAE, said the bank's chief executive Peter Baltussen in the statement.
CBD, 20 per cent owned by Investment Corp of Dubai, has an outstanding loan of $450 million due in August 2014, according to Thomson Reuters data, but has so far not issued any public debt denominated in U.S. dollars.
Banks in the region have been able to take advantage of low borrowing costs to secure funding for regional expansion, as well as bolster their capital ratios.
Last year, bond sales in the financial sector accounted for 44 percent of total bond issuance in the Gulf Co-operation Council.-Reuters
More Finance & Capital Market Stories
- GIH picks ex-Barclays banker as investment head
- Jeddah Economic Company names new CEO
- Saudi real GDP growth surges to 3.1pc in Q3
- UAE business activity growth hits record high
- Global Islamic banking assets ‘set to top $1.7trn’
- Egypt back in business, says new survey
- United Arab Bank backs UAE-Turkey business
- Islamic finance 'facing integration challenge'
- Bahrain tops in developed Islamic finance sector
- DME sets new trading records