Font Size

- Aa +

Mon 28 Nov 2011 12:13 PM

Font Size

- Aa +

Emirates NBD may issue bond; CEO says timing is key

Dubai's largest bank by assets seen favouring Islamic bond; could mandate banks this week

Emirates NBD may issue bond; CEO says timing is key
Emirates NBD chief executive Rick Pudner

Emirates NBD, Dubai's largest bank by assets, is considering
a five-year, dollar-denominated bond, its chief executive said on Monday,
adding the lender is waiting for the right timing for any eventual issue.

Emirates NBD is seen favouring an Islamic bond, or sukuk,
and could mandate banks as early as this week, four banking sources had earlier
said.

The sources, speaking on condition of anonymity, said ENBD
has drawn up a shortlist of seven or eight banks from which it will select the
institutions which will manage the sale.

This list includes National Bank of Abu Dhabi, Standard
Chartered, HSBC, Citi, Royal Bank of Scotland and ENBD itself.

"We are looking at five-year but the size we are not
sure. We will determine that by the next week or 2 weeks," chief executive
Rick Pudner told reporters on the sidelines of a company event. "We
haven't mandated any banks yet. It's very much a case of looking at the
opportunities.

"There were quite a few issues recently so we have
decided to wait a little bit and see what the right timing is for going into
the market."

Both conventional and Islamic institutions, as well as
global sovereigns such as Bahrain and Indonesia, have been flocking to the
sukuk market recently, creating an unusually active fourth quarter.

Emirates NBD has issued around $500m in privately-placed
paper so far in 2011, with all of it sold to European investors, a Gulf-based
banking source said.

One of the largest, with an issue date of Nov 3, was a $163m
two-year bond which priced at 140 basis points over the three-month London
interbank offered rate with a 1.832 percent coupon through sole bookrunner
Commerzbank.

The quarterly putable bond, which means investors can ask
for the cash to be repaid every three months, achieved a good price in the
volatile environment, a separate banker said.

In May, Emirates NBD, which has about $2.18bn in debt
maturities in 2012, completed a debt swap for two existing notes due to expire
in 2016 for longer-term debt. It has repeatedly said it would not overpay for
issuing new debt, and pricing levels so far this year had been too expensive.

When asked about sanctions on Syria by the Arab league,
Pudner said: "We haven't seen any guidance yet. May be we will get some in
the near future."

The Arab League approved unprecedented economic sanctions against
Syria, isolating President Bashar Al Assad's government over its eight-month
crackdown on protests against his rule.

The sanctions include a travel ban on top Syrian officials,
a freeze on assets related to Assad's government and are aimed at halting
dealings with Syria's central bank and investment in the country.

Emirates NBD shares were flat on the Dubai bourse on Monday
but are up nearly 20 percent this year.