The National Bank of Ras Al-Khaimah P.S.C. (“RAKBANK”), rated Baa1 by Moody’s and BBB+ by Fitch (both with stable
outlook), successfully priced a 5-year USD 500 million bond issuance. The bond was issued at 99.275% and will pay an annual coupon of 3.250%, equivalent to 160 bps over 5-year USD Mid Swaps. The issuance marks RAKBANK’s return to the bond markets after a hiatus of almost ten years and is the first non-government issuance from the Emirate of Ras Al-Khaimah.
The success of the transaction came on the back of a focused marketing strategy aimed at reintroducing RAKBANK’s credit story to international investors and included a roadshow covering Abu Dhabi, Dubai, Singapore and London.
The strong investor demand received for the issuance, as evidenced by an orderbook of USD 1.6 billion, representing an oversubscription of over 3.2 times, allowed RAKBANK to price at 160bps over USd Mid-Swaps, which was 10bps inside the initial price guidance of 170bps over USD Mid-Swaps. The investor base captured was well diversified with banks comprising 47% of the orderbook, followed by fund managers (36%), private banks (12%) and insurance companies (5%).
RAKBANK Chief Executive Officer, Peter England, said: “We are very pleased with the success of the transaction, which highlights the confidence placed by investors in the Bank. It was important for us to take advantage of the current low-cost financing opportunities in the bond market to proactively tackle the duration mismatch that arises from funding longer tenure loans using short-term deposits, a practice common in the UAE. Furthermore, the issuance allows us to diversify our sources of funding and access a wider base of investors.”
Standard Chartered Bank and National Bank of Abu Dhabi acted as Joint Arrangers and Joint Lead Managers, with Commercial Bank International and Union National Bank as Co-Managers on this transaction.
