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Mashreqbank, one of the UAE’s leading financial institutions, announced today (July 2) the pricing of its 8.5% perpetually irredeemable 5-year Additional Tier 1 Notes at an aggregate principal amount of US$300 million. The offering is expected to close on July 7, subject to customary closing conditions.
Following a strong first quarter deal update, a virtual roadshow for Reg S-only deals was announced.
Through a combination of global investor conference calls and individual and group meetings, Mashreq has reached out to more than 50 investors from key centers in Europe, the Middle East and Asia. After an extensive marketing campaign, the deal officially launched on June 30.
The UAE released an initial price negotiation (IPT) of mid-low 8% at 9.15am. Despite a challenging and volatile market backdrop, investors demanded over $500 million during the London morning: Book update was announced at 12.30pm London time, allowing Mashreq to set a yield of 8.500% and convey 3 billion dollar transaction size.
According to Mashreq, the offering is expected to further strengthen its capital structure and leverage, setting it up for further balance sheet growth.
In addition, it diversifies the bank’s fund portfolio by reducing the concentration of funds and increasing the average maturity of liabilities.
In addition, the transaction boosts Mashreq’s international credit profile as it marks the bank’s first additional tier 1 offering in international debt capital markets – and the first additional tier 1 offering outside the UAE this year.
Regarding the offering, Mashreq Group CEO Ahmed Abdelaal said: “The demand from regional and international investors for this successful financing demonstrates continued confidence in Mashreq and our ability to tap into global debt even in volatile conditions as a leading UAE bank. Capability of capital markets.”
“With strong capital and liquidity levels and a rock-solid balance sheet, Mashreq is well positioned to execute our growth and customer innovation strategies in the UAE and our core international markets,” he said.
Bank of America Securities, Citi, Emirates NBD Capital, JP Morgan, Mashreqbank, Societe Generale and Standard Chartered acted as joint lead managers.-TradeArabia News Service
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