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National Bank of Abu Dhabi (NBAD) has issued a 500 million Malaysian ringgit ($163.4 million) Sukuk, its third issuance denominated in currency, the bank announced in a statement.
The new Sukuk is the first ever issue of a subordinated debt by a non-Malaysian FI in Malaysia.
It was issued for 15 years at a coupon of 4.75 per cent following strong investor demand, the bank said.
HSBC Amanah Malaysia Berhad, Maybank Investment Bank Berhad, Standard Chartered Saadiq Berhad, and National Bank of Abu Dhabi Malaysia Berhad were the joint lead managers.
"This new issue, which also strengthens NBAD's capital levels, reflects the commitment of NBAD to create a yield curve in Malaysian ringgit to meet the strong investor demand for our credit and fits in very well with our core strategy of diversifying the bank's funding sources and extending our maturity profile," said Stephen Jordan, NBAD's group treasurer.
NBAD issued its first ever Sukuk and first issuance denominated in Malaysian ringgit in June 2010. The 500 million ringgit issuance will mature in 2015.
The bank issued its second ten-year 500 million ringgit in December 2010.
"Both issuances received extremely strong investor demand and were oversubscribed," said NBAD.
The bank recently inaugurated its wholly owned subsidiary National Bank of Abu Dhabi Malaysia Berhad (NBAD - Malaysia) in Kuala Lumpur and made Malaysia its regional hub to lead expansion in the country and across Southeast Asia.
Fund managers say there is still substantial latent demand for Gulf debt but investors would no longer accept tight pricings that prevailed just six months ago
Initial price thoughts were set in the 140 basis points area over midswaps for the sukuk, which have an agency-based structure known as wakala.
The capital-enhancing issue is a perpetual issue structured to comply Basel III norms, a statement said.
The bond was priced at a spread of 110 basis points over midswaps and carried a profit rate of 2.843 per cent, the document said.