CBD moves to clear USD 600 mn in debt as regional banks brace for a capital squeeze

Commercial Bank of Dubai (CBD) will redeem and delist its USD 600 mn Additional Tier 1 (AT1) bonds on 21 April, according to a regulatory filing (pdf). The bonds, which were issued in 2020 and listed on Euronext Dublin and Nasdaq Dubai, will be redeemed at their full principal amount plus accrued interest.

The move comes despite a time of stress for regional banks, many of which will be looking to shore up liquidity to navigate a potential climate of softening demand, asset quality strains, lower business volumes, and higher impairments if the war persists. The Central Bank of the UAE also introduced a package of measures that includes increasing lenders’ access to reserves of up to 30% and allowing them to dip into capital buffers while delaying loan reclassifications for stressed clients.

While many UAE banks enter this period from a position of strength — with ample liquidity and robust capital buffers — elevated real estate credit exposure at some banks could threaten asset quality further should property valuations be impacted by the war, Fitch has recently said. CBD itself has almost 20% exposure to real estate in its loan book. Some GCC banks are also expected to slash dividends by as much as 50% this year to preserve a USD 10 bn capital cushion required to weather the conflict’s economic fallout.

ePointZero taps India’s renewables market

Abu Dhabi’s ePointZero — the decarbonization arm of 2PointZero Group — is entering India’s renewable energy market via a new joint venture with India’s Adani Green Energy, according to a press release (pdf). The partnership targets the development of solar, wind, hybrid, and energy storage projects in India. ePointZero’s India-based renewable development platform Minvera will carry out the work, while Adani Green Energy will provide capital in exchange for up to 20% of the JV through its UAE subsidiary.

ePointZero has been busy overseas, moving to acquire US-based Traverse Midstream Partners for USD 2.3 bn last month and partnering with Egypt’s Elsewedy Electric on up to 300 MW of solar capacity in Zambia last November.

Homegrown Al Habtoor is bullish on UAE

Al Habtoor to launch AED 5 bn build in Dubai: Dubai’s real estate market heldup in 1Q and despite fears of an incoming war-induced cooldown and credit cracks starting to show, one big name at least is still confident. UAE-based Al Habtoor Group announced plans to build an AED 5 bn commercial tower in the emirate, chairman Khalaf Al Habtoor said in a post on X. Details are sparse for now, but more builds are in the cards in both Dubai and Abu Dhabi, as the chairman said the UAE would still be an investment hub.

Refocusing back home: At the end of last year, Al Habtoor said it was scrapping its plans to invest in Lebanon, and would exit all its properties and investments in the country. Later in January, Al Habtoor said it would pursue court action against Lebanese authorities “severe and sustained harm” to its assets by the government and central bank.

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