Abu Dhabi: First Abu Dhabi Bank (FAB) has successfully issued its inaugural USD Tier 2 capital securities on September 26, 2023.
The $1 billion 10.5NC5.5-Year Tier 2 Bond marks the largest-ever Tier 2 issuance from a UAE bank and the largest-ever Tier 2 conventional bond issuance from a MENA bank.
The bond was priced at a spread of UST+170bps, resulting in a yield of 6.32 per cent, the tightest spread on a callable Tier 2 structure in 2023 globally.
FAB allocated 79 per cent of the issuance to investors outside the Middle East, with investor demand reaching just under $3 billion, marking the largest book size ever achieved by FAB.
Despite market volatility, FAB tightened pricing by 30 basis points and increased the deal size to $1 billion, thanks to its strong credit standing and the UAE's robust macroeconomic fundamentals.
Over 228 investors participated in the transaction, including numerous global asset managers. FAB also served as the joint lead manager and bookrunner for this Tier 2 bond issuance.