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Mon 18 Oct 2010 12:14 PM

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Abu Dhabi Islamic to meet investors before bond sale

Bank will hold 'non-equity' meetings in Asia, Europe and the Middle East from Oct 20

Abu Dhabi Islamic to meet investors before bond sale
Abu Dhabi Islamic Bank branch at Al Wahda Mall, Abu Dhabi (Image: Mall website)

Abu Dhabi Islamic Bank, the UAE's second-biggest lender complying with Shariah principles, will start meeting overseas investors this week before a possible sale of Islamic bonds.

The bank will hold “non-equity” meetings in Asia, Europe and the Middle East from Oct. 20, the lender said in a statement to the Abu Dhabi bourse on Monday. Abu Dhabi Islamic hired HSBC Holdings Plc, Standard Chartered Plc and Barclays Plc to help sell bonds, two bankers familiar with the plan said last week.

Bond sales from the Persian Gulf have picked up since Dubai World in September reached an agreement with 99 percent of its creditors to alter the terms on $24.9 billion of debt. Qatar Islamic Bank SAQ issued $750 million of five-year Islamic bonds on Sept. 30. The Dubai government last month raised $1.25 billion in its first bond sale since the Dubai World debt crisis.

“The success of recent bond issues from this region clearly demonstrates there is strong demand for high quality Gulf credits,” said Chavan Bhogaita, head of credit research at National Bank of Abu Dhabi PJSC, the U.A.E.’s second-biggest bank by assets. “Discussions with institutional investors lead us to believe that investor sentiment toward the Abu Dhabi story is very positive.”

ADIB has a $5 billion sukuk trust certificate program, according to a base prospectus dated July 8 posted by the bank on the London Stock Exchange’s website. The bonds will be issued from “time to time” in any currency, it said.

ADIB’s five-year, floating-rate sukuk due December 2011 traded at 98.63 cents on the dollar on Oct. 15, according to data compiled by Bloomberg. The bank is rated A2 by Moody’s Investors Service, the sixth-highest investment grade. (Bloomberg)