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NBAD issues $160m sukuk in Malaysia

ABU DHABI — The National Bank of Abu Dhabi, or NBAD, has successfully issued its second sukuk in Malaysia.

The bond issue was for 500 million ringgit ($160 million, Dh587.68 million) and was issued under NBAD’s MYR Medium Term Notes (MTN) three billion programme. The offering received strong investor demand despite the challenging year-end timing and was more than two times oversubscribed, showing the underlying appetite of investors for NBAD’s credit.

The 10-year sukuk has a coupon of 4.9per cent. HSBC, Royal Bank of Scotland, and Malaysia’s Maybank were the joint lead mangers (JLMs) for this transaction. The transaction has a strong distribution across a wide investor base with a breakdown of fund managers 33 per cent, insurance companies 27 per cent, financial institutions 10 per cent, and other corporations 30 per cent.

This 10-year issue, which comes six months after NBAD’s first ever sukuk issuance, reflects the commitment of NBAD to create a yield curve in MYR to meet the strong investor demand and fits in very well with the core strategy of diversifying the funding base and extending the liability maturity profile.

“We are delighted with the outcome. This is our second MYR issuance in one year, which confirms investors understanding and appreciation of NBAD’s strong credit fundamentals and also confirm our flexibility to meet investors’ demands. This issue fits in well with our medium term strategy of diversifying our funding sources,” NBAD Financial Markets Division Senior General Manager Mahmood Al Aradi said. —