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Wed 9 Nov 2011 04:46 PM

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Abu Dhabi's ADIB eyes investors for Islamic bond

Investor meetings planned in Kuala Lumpur, Singapore, the UAE and London this month

Abu Dhabi's ADIB eyes investors for Islamic bond
Abu Dhabi Islamic Bank branch at Al Wahda Mall, Abu Dhabi (Image: Mall website)

Abu Dhabi Islamic Bank will hold investor meetings for a potential dollar-denominated Islamic bond, or sukuk, starting next week, it said in a statement to the bourse on Wednesday.

Meetings kick off in Kuala Lumpur on November 17, and will cover Singapore and the United Arab Emirates, before ending in London on November 21.

A sukuk issue under the bank's existing $5 billion programme "may follow, subject to market conditions," the statement said. The company is eyeing a benchmark-sized deal, widely accepted to mean at least $500 million.

Demand for sukuk assets globally is thought to be strong, despite the global volatility, partly because Islamic investors in the Gulf remain cash-rich, and also partly due to the limited supply of sukuk this year.

The market has proved more resilient also due to the profile of sukuk investors, who tend to hold the bonds to maturity, reducing the chance of big swings in secondary market prices triggered by shorter-term speculators bailing out of positions.

ADIB last tapped the debt markets when it issued its debut five-year $750m sukuk with a 3.745 percent coupon under the existing programme in October last year.

That bond was bid at 103.643 at 1145GMT on Wednesday, Thomson Reuters data showed. The sukuk was yielding about 2.769 percent, down from about 3.2 percent at the beginning of October.

ADIB itself, Citi, National Bank of Abu Dhabi, HSBC, Nomura, and Standard Chartered are arranging the meetings, an announcement from the banks seen by Reuters said.

ADIB shares are up almost 8 percent this year. The company reported flat third quarter profits last month but still beat analyst forecasts.

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