National Bank of Abu Dhabi (NBAD) said it priced its Dh2 billion ($544.7 million) of convertible bonds at 25 basis points below Emirates Interbank Offered Rate (EIBOR) and would convert at 30 per cent above its last trade.

The 10-year floating rate notes, which are being sold to help finance investment banking operations and foreign expansion, will pay interest every quarter, the second-largest lender in the UAE said in a statement on Tuesday.

Three-month EIBOR was 2.89 per cent on Tuesday, according to the average rate of seven UAE banks.

The conversion price of Dh30.55 per share compares with Tuesday's closing price of Dh23.50, the bank said. The bonds will list on the London Stock Exchange. Like other Gulf Arab lenders, NBAD is looking to expand outside its home market as competition intensifies.

It applied for a licence to open a representative office in Libya, where it sees long-term potential, and plans to open offices in Asia, Jordan and Qatar this year, chief executive Michael Tomalin told Reuters last month.

'Our strategy is to grow organically,' Tomalin said. 'We do not want to pay large amounts of goodwill to companies.'

Abu Dhabi's First Gulf Bank (FGB) said earlier this month it could return to the debt market by selling as much as $2.5 billion of bonds that are convertible to shares after delaying a bond sale last year.-Reuters