Dubai, 26th October, WAM – Commercial Bank of Dubai has issued an additional, non-callable, Tier 1 permanent bonds with a maturity of six years for a period of US $ 600 million at an interest rate of 6.00%, which is the lowest interest rate from a bank issuer in Dubai so far as additional bonds for the first tier. Of the capital in accordance with the requirements of “Basel 3″.
This issuance, which is an introductory level 1 issuance for the bank, also represents a return to the capital markets since the bond was launched in 2015 and is the second tier 1 issuance from the GCC countries that includes a nominal call feature after six months.
Standard Chartered Bank and Citibank acted as joint global structuring agents and coordinators, while Standard Chartered, Citibank, Barclays, Emirates NBD, First Abu Dhabi Bank and Nomura acted as joint lead managers of the bonds. The bonds will be listed in Euronext Dublin and Nasdaq Dubai.
On October 12, 2020, Commercial Bank of Dubai announced a new mandate for the S-Regulation for additional permanent non-callable Tier 1 bonds with a maturity of six years. The issuance witnessed a turnout of investors from the Middle East, North Africa, Europe and Asia. The presentations were widely welcomed, as they included the main points that Highlighted to investors is Commercial Bank of Dubai’s strong creditworthiness, stable ownership and stable growth accompanied by strong financial performance.
These factors, in addition to other things, constituted a factor of attraction to attract high-quality requests with strong participation from more than a hundred investors despite the volatile conditions and great challenges in the global financial markets, so that Commercial Bank of Dubai benefited from high-quality requests, which enabled it to review prices, reduce them and determine the return. At 6.00% for a USD 600 million issue, the rate is the lowest interest rate for a bank issuer in Dubai so far and compares favorably with recent issues in the region.
The issuance closed on October 21 and the demand was well diversified, with 61% of the allocation allocated to investors from the MENA region, 24% to Europe, and 13% to investors from Asia.
Dr. Bernd Van Linder, Chief Executive Officer of Commercial Bank of Dubai said, “We are pleased with the success of the issuance, which reflects the solidity of the bank’s strategic vision and the firm commitment to implementing the strategies developed over the years. This issuance will enhance and provide additional support for local businesses in the present and the future as we would like. We would like to thank all the parties that participated in this issue, especially the investors who still place great confidence in Commercial Bank of Dubai. ”
Darren Clark, the bank’s chief financial officer, said, “The price points achieved in this issue are in line with our expectations as being the lowest interest paid by a Dubai-based banking issuer so far in line with Basel 3 requirements and this issuance will enhance the construction of the first tier of the bank’s capital. It enhanced the bank’s capital adequacy. ”
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