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Sun 10 Feb 2008 12:11 PM

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NBAD to sell $545mn of bonds to fund expansion

Abu Dhabi lender says 10-year floating rate convertible bonds to be listed on London bourse.

National Bank of Abu Dhabi (NBAD) said on Saturday it would sell 2 billion dirhams ($544.7 million) worth of convertible bonds to help finance investment banking operations and expansion overseas.

The second-largest UAE lender by market value said in the 10-year floating rate convertible bonds would be listed on the London Stock Exchange (LSE).

"It [the bond] will be used for general corporate purposes, including growth in lending, retail, investment banking and expansion into new businesses," Stuart Henrickson, general manager of the investment banking group at NBAD told newswire Reuters.

The bonds would be sold in different markets including the Middle East and Europe, Henrickson said.

"The notes are being marketed to investors with a floating rate coupon... all payments under the notes will be made at the applicable US dollar equivalent amount to the dirham amount," the lender said in the statement, adding that they would be convertible during the first five years after issue.

The lender launched a $5 billion Euro Medium Term Note programme in 2006 and had sold almost $1.5 billion of bonds in currencies such as Swiss francs and sterling by March 2007.

The bank, which is expanding abroad as competition at home intensifies, has applied for a licence to open a representative office in Libya, where it sees long-term potential, and also plans to open offices in Asia, Jordan and Qatar this year, Chief Executive Michael Tomalin said in January.

"Our strategy is to grow organically," Tomalin said. "We do not want to pay large amounts of goodwill to companies."

Abu Dhabi's First Gulf Bank (FGB) said earlier this month it could return to the debt market by selling as much as $2.5 billion of bonds that are convertible to shares after delaying a bond sale last year. (Reuters)

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