Al Masraf (rated A by Fitch), a federal bank in the United Arab Emirates, successfully priced a USD 500 million senior unsecured 5-year bond at a credit spread of 125 basis points over the U.S. treasury rate, which equates to a coupon of 5.113% per annum. 

The transaction generated robust demand as evidenced by an orderbook peaking over USD 1.3 billion, representing a 2.6x oversubscription rate. The orderbook reflected interests from both regional and international investors represented by world’s largest fund managers, banks, private banks, pension funds, and insurance companies. 

The transaction marks Al Masraf’s inaugural access to the public bond market,  underscoring an important milestone in the bank’s funding strategy and balance sheet diversification. 

Al Masraf did the mandate announcement for the Bond on Friday 16 January followed by meeting with investors in Hong Kong, Singapore, United Kingdom, and the UAE. The bond was priced, and the transaction was closed on Thursday 22 January. 

Fuad Mohamed, CEO of Al Masraf stated “The strong investor demand, reflects the investors’ belief in Al Masraf’s renewed strategic direction, reinforced management, and the positive strides on financial metrics over the last 12 months. Our capital market debut in the Bank’s Golden Jubilee year allows us to penetrate the international markets and reach out to a diverse investor base while at the same time reinvigorates the relations with our esteemed regional partners.”

Ahmad Yousuf, Head of Treasury & Investments, added “The EMTN program set up and the issuance of the first tranche is an important milestone in the history of the Bank. Our objectives to tap the capital market with a sizeable benchmark issuance, maximize the investor reach and offer a fair pricing on the bonds were achieved through this issuance, laying the foundation for future access to capital markets.”

The Bond will be rated A by Fitch and will be listed on the London Stock Exchange’s International Securities Markets and Nasdaq Dubai. The Joint Lead Managers on the transaction were Emirates NBD Capital, First Abu Dhabi Bank, Mashreq bank, RAK bank, and Standard Chartered Bank while the legal advisors were A&O Shearman and Linklaters.