First Abu Dhabi Bank sells $500mln sukuk as Gulf bonds heat up

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First Abu Dhabi Bank, the largest lender in the United Arab Emirates, sold sukuk, or Islamic bonds, worth $500 million on Thursday, as Gulf issuers start tapping debt investors in what is likely to be another record year for regional bonds.

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According to a document issued by one of the banks leading the deal and seen by Reuters, the five-year paper offers investors a profit rate equivalent to 90 basis points over mid-swaps.

It was marketed earlier on Thursday with an initial price guidance of 100-105 basis points over mid-swaps.

The issuance, which will be completed later on Thursday, comes on the heels of a $750 million bond sale by rival Emirates NBD, Dubai’s largest bank, on Wednesday - the first public debt issuance from the Gulf region this year.

Banks, corporates and governments in the oil-rich Gulf region are expected to rely heavily on debt financing this year after the coronavirus crisis and lower energy prices squeezed their finances.

The Gulf saw a second consecutive year of record international bonds last year, topping $100 billion, and is likely to notch up another record this year, bankers and analysts have said.

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