Abu Dhabi – Mubasher: First Abu Dhabi Bank (FAB) recently issued its inaugural USD Tier 2 capital securities at a value of $1 billion to become the largest conventional bond of its kind from a MENA bank.

The 10.5NC5.5-year bond, which was offered on 26 September 2023, is also the biggest Tier 2 issuance from a UAE lender, according to FAB's statement.

Priced at a spread of 170 basis points (bps) above US Treasuries, the bond yielded 6.32% and witnessed the tightest spread paid by any bank globally on a callable Tier 2 structure throughout 2023.

The investor demand reached nearly $3 billion and FAB increased the initially anticipated deal size from $750 million. Additionally, the order book attracted more than 228 investors from across the globe, with 79% of the issuance allocated to investors outside the Middle East.

FAB acted as joint lead manager and bookrunner for the bond.

During the first nine months (9M) of 2023, the UAE lender logged net profits of AED 12.41 billion

Meanwhile, in the first half (H1) of 2023, FAB generated net profits worth AED 8.15 billion, a 65% annual increase from AED 8.03 billion.