Emirates NBD is preparing to test investor appetite with a debt swap, as the banking sector begins a round of refinancing that could set the tone for fund-raising efforts for the rest of the year.
The Dubai bank, the UAE's largest by total assets, will offer longer dated notes due in 2018 to holders of its existing subordinated debts, due in 2016. Those have a total of US$514 million (Dh1.88 billion) outstanding.
The notes will be priced at 1.5 per cent above three-month US dollar London interbank offered rates, according to a filing to the Nasdaq Dubai exchange. Investor demand for the swap will be revealed after the offer closes on Thursday.
Analysts said the move was primarily an effort to bolster capital adequacy rather than address liquidity needs. But the swap comes as several of the UAE's big banks attempt to refinance their upcoming debts.
Regional debt issuances dwindled in the first quarter of the year because the Middle East's political turmoil sparked widespread concern.
Although issuers are returning to the market, this week's takeover of Dubai Bank may raise some question marks over international investors' appetite for bank debts. The Dubai Government moved to take over the Islamic lender on Monday to protect depositors.
However, investment bankers said the demand for credit from Sharjah Islamic Bank, which returned to markets with a $400m sukuk on Wednesday, showed that investors in UAE bank debt were not taking fright.
"I don't think demand for banks' [issuances] in the UAE is dropping by any stretch," said one Dubai investment banker.
Abu Dhabi Commercial Bank has sterling, euro and yen bonds worth the equivalent of $880m that are due for repayment at the end of this year, while Abu Dhabi Islamic Bank must repay an $800m sukuk maturing in December, according to data from Bloomberg News. For Emirates NBD, $773m worth of debt is due to mature this year.
Capital adequacy ratios in the banking sector have increased greatly as the UAE's property decline eases and revenues from higher oil prices flow through the financial system.
"Liquidity positions of the banks have dramatically improved recently," said Jaap Meijer, a financial analyst at Alembic HC Securities.
Speculation has been mounting that Dubai Bank will be merged with Emirates NBD or Emirates Islamic Bank, its Sharia-compliant subsidiary.
ghunter@thenational.ae
FA Cup fifth round draw
Sheffield Wednesday v Manchester City
Reading/Cardiff City v Sheffield United
Chelsea v Shrewsbury Town/Liverpool
West Bromwich Albion v Newcastle United/Oxford United
Leicester City v Coventry City/Birmingham City
Northampton Town/Derby County v Manchester United
Southampton/Tottenham Hotspur v Norwich City
Portsmouth v Arsenal
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Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Try out the test yourself
Q1 Suppose you had $100 in a savings account and the interest rate was 2 per cent per year. After five years, how much do you think you would have in the account if you left the money to grow?
a) More than $102
b) Exactly $102
c) Less than $102
d) Do not know
e) Refuse to answer
Q2 Imagine that the interest rate on your savings account was 1 per cent per year and inflation was 2 per cent per year. After one year, how much would you be able to buy with the money in this account?
a) More than today
b) Exactly the same as today
c) Less than today
d) Do not know
e) Refuse to answer
Q4 Do you think that the following statement is true or false? “Buying a single company stock usually provides a safer return than a stock mutual fund.”
a) True
b) False
d) Do not know
e) Refuse to answer
The “Big Three” financial literacy questions were created by Professors Annamaria Lusardi of the George Washington School of Business and Olivia Mitchell, of the Wharton School of the University of Pennsylvania.
Answers: Q1 More than $102 (compound interest). Q2 Less than today (inflation). Q3 False (diversification).
Dubai Bling season three
Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed
Rating: 1/5
Islamophobia definition
A widely accepted definition was made by the All Party Parliamentary Group on British Muslims in 2019: “Islamophobia is rooted in racism and is a type of racism that targets expressions of Muslimness or perceived Muslimness.” It further defines it as “inciting hatred or violence against Muslims”.
De De Pyaar De
Produced: Luv Films, YRF Films
Directed: Akiv Ali
Cast: Ajay Devgn, Tabu, Rakul Preet Singh, Jimmy Sheirgill, Jaaved Jaffrey
Rating: 3.5/5 stars
World record transfers
1. Kylian Mbappe - to Real Madrid in 2017/18 - €180 million (Dh770.4m - if a deal goes through)
2. Paul Pogba - to Manchester United in 2016/17 - €105m
3. Gareth Bale - to Real Madrid in 2013/14 - €101m
4. Cristiano Ronaldo - to Real Madrid in 2009/10 - €94m
5. Gonzalo Higuain - to Juventus in 2016/17 - €90m
6. Neymar - to Barcelona in 2013/14 - €88.2m
7. Romelu Lukaku - to Manchester United in 2017/18 - €84.7m
8. Luis Suarez - to Barcelona in 2014/15 - €81.72m
9. Angel di Maria - to Manchester United in 2014/15 - €75m
10. James Rodriguez - to Real Madrid in 2014/15 - €75m
Other acts on the Jazz Garden bill
Sharrie Williams
The American singer is hugely respected in blues circles due to her passionate vocals and songwriting. Born and raised in Michigan, Williams began recording and touring as a teenage gospel singer. Her career took off with the blues band The Wiseguys. Such was the acclaim of their live shows that they toured throughout Europe and in Africa. As a solo artist, Williams has also collaborated with the likes of the late Dizzy Gillespie, Van Morrison and Mavis Staples.
Lin Rountree
An accomplished smooth jazz artist who blends his chilled approach with R‘n’B. Trained at the Duke Ellington School of the Arts in Washington, DC, Rountree formed his own band in 2004. He has also recorded with the likes of Kem, Dwele and Conya Doss. He comes to Dubai on the back of his new single Pass The Groove, from his forthcoming 2018 album Stronger Still, which may follow his five previous solo albums in cracking the top 10 of the US jazz charts.
Anita Williams
Dubai-based singer Anita Williams will open the night with a set of covers and swing, jazz and blues standards that made her an in-demand singer across the emirate. The Irish singer has been performing in Dubai since 2008 at venues such as MusicHall and Voda Bar. Her Jazz Garden appearance is career highlight as she will use the event to perform the original song Big Blue Eyes, the single from her debut solo album, due for release soon.
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Fire and Fury
By Michael Wolff,
Henry Holt
MATCH INFO
Liverpool 0
Stoke City 0
Man of the Match: Erik Pieters (Stoke)
MATCH INFO
Burnley 0
Man City 3
Raheem Sterling 35', 49'
Ferran Torres 65'
