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Tue 8 Feb 2011 08:29 PM

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UAE lender ADCB eyes 150m Swiss-franc bond

Picked RBS and UBS for the 150m Swiss franc bond which matures in 2015 with pay coupon of 3 percent

UAE lender ADCB eyes 150m Swiss-franc bond
ADCB BANK: Swiss franc bonds allow Gulf issuers to tap cheaper funding due to an attractive swap rate with US dollars

Abu Dhabi Commercial Bank has mandated banks for a bond issue in Swiss
francs, due to price on Tuesday, the third Gulf lender to test the Swiss market
to diversify and access cheaper funding in recent months.

ADCB picked RBS and UBS for the 150 million Swiss franc ($157.3m) bond which
matures in 2015 with an expected coupon of 3 percent, reported IFR Markets, a
unit of Thomson Reuters.

"Swiss franc bonds allow Gulf issuers to tap cheaper funding due to an
attractive swap rate with US dollars, and the most attractive maturity is
five-year as that is where you are getting the biggest pick-up", said
Thomas Christie, fixed income sales trader at Wallich & Matthes in Dubai.

"Also, for both the issuers and investors, it allows them to regionally
diversify their issue placement and investment."

ADCB is looking to raise finances for general corporate purposes, a source
familiar with the deal told Reuters.

The company's plan follows a Swiss franc bond issue by another Abu Dhabi
lender, First Gulf Bank, which sold five-year bonds worth 200 million Swiss
francs, with a coupon of 3 percent, in January.

Commercial Bank of Qatar tapped the Swiss market with a five-year, 275 million
Swiss franc-denominated bond issue in November, the first Qatari credit issued
in the currency, which also pays a coupon of 3 percent.

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