Mashreq taps debt markets with benchmark AT1 offering

Our friends at Mashreq are heading back to the debt markets, launching a benchmark-sized USD-denominated additional tier-one (AT1) issuance, Zawya reports. The Dubai-based lender is marketing a perpetual non-call 5.5-year AT1 note, with investor calls beginning yesterday. The Regulation S issuance will be listed on the Global Exchange Market of Euronext Dublin.

The transaction marks Mashreq’s first public debt issuance since the onset of the US-Iran conflict. The bank last tapped markets in February, raising USD 500 mn through a perpetual non-call 5.5-year AT1 that was priced at 6.25% after being 4.2x oversubscribed.

Step back: AT1 activity has been picking up recently after a quieter period for debt markets during the war. Dubai Islamic Bank recently saw orders of over USD 2.3 bn for its USD 1 bn AT1 sukuk, while Emirates NBD reopened the regional AT1 market at the end of April with a USD 750 mn issuance. Subsequent issuances from other regional lenders are set to follow, signalling there’s still appetite for GCC paper despite geopolitical uncertainty.

ADVISORS- Abu Dhabi Commercial Bank, BBVA, Barclays, Bank of America, Crédit Agricole, Emirates NBD Capital, First Abu Dhabi Bank, Mashreq, and Standard Chartered are joint lead managers for the issuance.