RIYADH, May 4 (Reuters) - Abu Dhabi Commercial Bank (ADCB), the United Arab Emirate’s second largest bank by assets, plans to issue a senior unsecured dollar bond, banking sources familiar with the matter said on Thursday.
The transaction is expected to be of benchmark size, which usually means at least $500 million.
At least four banks have been appointed to arrange the deal, one of the sources said.
ADCB declined to comment when contacted by Reuters.
This latest bond issue joins a significant pipeline of debt sales by banks in the Gulf, with both Saudi Arabia’s Saudi British Bank and Kuwait’s National Bank of Kuwait planning to raise funds internationally, as reported by Reuters.
Sovereigns, banks and corporates in the Gulf Cooperation Council have relied increasingly on the international debt markets to replenish their coffers hit by the drop in oil prices in late 2014.
“We expect more debt issuance from financial institutions from both Saudi and other GCC countries,” said Bashar Al Natoor, global head of Islamic finance at Fitch Ratings, speaking to Reuters on the sidelines of a Euromoney conference in Saudi Arabia this week.
“Liquidity is better than in early 2016 but banks still have some issues such as Basel III requirements and non-performing loan ratios, so they might still need financing.”
ADCB is a regular issuer in the international markets and has raised almost $1 billion this year through two Formosa bonds of $750 and $230 million. Formosa bonds are sold in Taiwan by foreign issuers and are denominated in currencies other than the Taiwanese dollar. (Editing by Jane Merriman)