CBD completes its USD 600 mn AT1 reset

Commercial Bank of Dubai (CBD) has issued USD 600 mn in Perpetual Additional Tier 1 (AT1) capital securities and redeemed an existing USD 600 mn AT1 issuance, according to a statement from advisor Dentons. The new securities carry a fixed-rate, resettable coupon of 6.625% and are listed on Euronext Dublin and Nasdaq Dubai.

This completes the replacement trade: We previously noted CBD had upsized its AT1 comeback to USD 550 mn from an initial USD 500 mn target after orders topped USD 825 mn, with pricing inside initial guidance in the low 7% area. The latest statement puts the transaction at USD 600 mn, matching the size of the AT1 CBD redeemed in April and effectively resetting that layer of the bank’s regulatory capital stack.

Zoom out: CBD is not alone in moving while the window is open. The print slots into the Gulf lender rush to lock in regulatory capital at cheaper levels, after Ajman Bank priced its debut AT1 sukuk at 6.50% earlier this month. The UAE saw a wave of AT1 issuances in June, from Dubai Islamic Bank, Mashreq, and First Abu Dhabi Bank, with similar later moves from Ajman Bank pointing to smaller, lower-rated lenders looking to take advantage of the spread rebound.

ADVISORS- Standard Chartered and Citi acted as joint structuring agents and joint global coordinators. ADCB, Barclays, Citi, CBD, Citi, Emirates NBD, FAB, and Standard Chartered were joint lead managers and bookrunners, while Dentons advised CBD.