FAB’s CNY1.5bn issue becomes second bond in 2 days

BBN Report

Bank all set to cross AED1trn in assets after Q4 results

ABU DHABI/ January 12-2021: First Abu Dhabi (FAB), the country’s largest bank with an asset base of AED955 billion (as of September end), seems to be on a bond issuance spree as it has issued two bonds in as many days.

Close on the heels of raising $500 million on Monday, the bank has announced yet another issuance of Chinese Yuan bond in Formosa on Tuesday (today).

The CNY bond is the year’s first Chinese Yuan (CNY) issuance in the Formosa bond market with a CNY1.5 billion five-year bond at 3.15 per cent.

This deal also represents the lowest coupon paid by a MENA bank on a public CNH five-year issuance, according to an FAB statement.

Set to cross AED1trn-mark in assets

Meanwhile, FAB is all set to become the first UAE bank and the second from the whole MENA region (after QNB) to cross the AED1trillion-mark in assets once the full-year financial results for 2020 are disclosed.

FAB, which has an asset base of AED955  billion (as of September end) needs only less than 5 per cent growth to achieve that covetable distinction, which can be taken as a given.

Issue was upsized

The successful offering on Tuesday was upsized to CNY1.5 billion from a target size of CNY1 billion. The majority of investors comprised both onshore Taiwanese and Asian investors and was well diversified amongst life insurers, banks, fund managers and securities houses.

The deal was opportunistically executed based on demand in the Formosa market as well as the CNY-USD swap level, which enabled FAB to issue inside their curve when swapped to US dollar.

“We are very pleased to have issued the first CNY deal of the year in the Formosa market. FAB has always been very well received in the Formosa market whether issuing in CNY or US dollar and we tend to be a frequent issuer in this market as a commitment to the Taiwanese and broader Asian investors,” Rula Al Qadi, Managing Director and Head of Group Funding at FAB, said.

Issues during 9 months

During the third quarter of 2020, FAB continued to be active in the wholesale funding markets raising $785 million of senior debt and $750 Million of Additional Tier 1 (AT1) capital.

During the first nine months ending September 30, 2020, the FAB Group had raised $4.4 billion of senior wholesale funding across different markets and currencies despite the weaker market backdrop and increased volatility due to the COVID-19 outbreak.

Following the successful CNY1.4 billion Formosa in the second quarter, the Group had issued a CNY3.6 billion 5-year Formosa, which was the largest CNY denominated Formosa from a non-domestic financial institution (outside China).

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