FAB goes local with debut digital AED green bond as Mashreq eyes Dim Sum market

Two of the UAE’s biggest lenders are stepping outside the usual USD benchmark playbook this week: one by going home to the AED market and the other by heading east to offshore CNH.

First, FAB: First Abu Dhabi Bank (FAB), the UAE’s largest lender by assets, has priced its first benchmark-sized, digitally native green bond in the local currency market rather than in USD, Zawya reports. The three-year AED-denominated green notes, priced at 75 bps over the three-year AED swap rate, settle on 15 October 2026. The exact issuance size and coupon have yet to be disclosed.

The fixed-rate Reg S notes carry expected ratings of Aa3 from Moody’s and AA- from S&P and Fitch, in line with FAB’s issuer ratings. They are expected to list on the Abu Dhabi Securities Exchange (ADX). Emirates NBD Capital, FAB, HSBC, ICBC (Asia), and Standard Chartered are joint lead managers and bookrunners, with Standard Chartered serving as billing and delivery bank.

Why it matters: Most Gulf bank green paper is printed in USD and listed offshore for international investors. A benchmark-sized green issuance in AED, issued digitally and listed on the ADX, adds depth to a domestic AED bond market that has so far been thin and establishes a new reference point on the local swap curve.

Meanwhile, Mashreq is eyeing the dim sum market: Our friends at Mashreq are testing the offshore CNH market, Zawya reports separately, citing IFR. The bank has mandated a group of banks to arrange investor calls for a three-year Dim Sum bond offering. Arrangers, size, and pricing guidance have not yet been made public.

Why it matters: Dim Sum bonds are denominated in offshore RMB (CNH) and issued outside mainland China, and Gulf issuers have dipped into them occasionally since Emirates NBD became one of the region’s first, an issuance analysts at the time said could open a new source of funding for GCC companies. Mashreq’s timing fits a broader revival: bankers have described the market as moving from a niche funding channel into a more mainstream financing option on the back of a firmer CNH. Newcomers this year include Portugal, which issued its first Dim Sum bond in April. For Mashreq, the issuance diversifies its investor base and deepens ties with Asian capital, in keeping with growing UAE-China trade and financial links.