NBAD sells benchmark bond worth $750m

Dubai : National Bank of Abu Dhabi (NBAD) sold a five-year benchmark bond worth $750 million (Dh2.75 billion) yesterday.

The new bond by NBAD was priced at 178 basis points over mid swaps, two banking sources told Reuters.

"It is 178 basis points, $750 million final," one of the sources told Reuters, adding demand for the paper stood at around $3.7 billion.

NBAD confirmed the size of the bond, which matures on March 21, 2015 and is a part of its EMTN programme, but did not reveal the final pricing.

The bank was seeking to raise $500 million to $1 billion, an executive told Reuters this week.

Guidance was set at 180-190 basis points above mid swaps, IFR Markets, a Thomson Reuters service, reported.

Repayment

Dubai's demand last year for a repayment freeze on $26 billion worth of debt at its flagship company Dubai World has soured investors sentiment towards certain entities with some delaying issuance plans.

But improved appetite towards emerging debt has encouraged some Gulf issuers, including state-owned utility Dubai Electricity and Water Authority (Dewa), to test the markets even as a Dubai World debt restructuring offer gets closer.

NBAD, which is 70 per cent owned by Abu Dhabi's government, last tapped the market with a similar-sized issue in September when it placed a five-year, 850 million paper with a coupon of 4.5 per cent.

The bank, rated ‘A' plus' by Standard & Poor's and ‘Aa3' by Moody's, is exposed to Dubai World units and it said earlier this week it may book more provisions against bad loans in the first quarter.

UAE banks need funds to boost lending in the second- biggest Arab economy. Growth is likely to accelerate to 3.2 per cent this year from 1.3 per cent in 2009, Sultan Bin Saeed Al Mansouri, Minister of Economy, said earlier this month.