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15 April 2024

ADCB eyes CHF150m bond

By Reuters

Abu Dhabi Commercial Bank has mandated banks for a bond issue in Swiss francs, due to price on Tuesday, the third Gulf lender to test the Swiss market to diversify and access cheaper funding in recent months.

ADCB picked RBS and UBS for the 150 million Swiss franc ($157.3 million) bond which matures in 2015 with an expected coupon of 3 percent, reported IFR Markets, a unit of Thomson Reuters.

"Swiss franc bonds allow Gulf issuers to tap cheaper funding due to an attractive swap rate with US dollars, and the most attractive maturity is five-year as that is where you are getting the biggest pick-up", said Thomas Christie, fixed income sales trader at Wallich & Matthes in Dubai.

"Also, for both the issuers and investors, it allows them to regionally diversify their issue placement and investment."

ADCB is looking to raise finances for general corporate purposes, a source familiar with the deal told Reuters.

The company's plan follows a Swiss franc bond issue by another Abu Dhabi lender, First Gulf Bank, which sold five-year bonds worth 200 million Swiss francs, with a coupon of 3 percent, in January.

Commercial Bank of Qatar tapped the Swiss market with a five-year, 275 million Swiss franc-denominated bond issue in November, the first Qatari credit issued in the currency, which also pays a coupon of 3 per cent.