{"id":92541,"date":"2024-05-30T00:00:00","date_gmt":"2024-05-30T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/uae\/mashreq-bank-taps-banks-for-at1-bond-issuance\/"},"modified":"2024-05-30T00:00:00","modified_gmt":"2024-05-30T00:00:00","slug":"mashreq-bank-taps-banks-for-at1-bond-issuance","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/uae\/2024\/05\/30\/mashreq-bank-taps-banks-for-at1-bond-issuance\/","title":{"rendered":"Mashreq Bank taps banks for AT1 bond issuance"},"content":{"rendered":"

Our friends at Mashreq are set to issue benchmark-sized, USD-denominated <\/strong>a<\/strong>dditional tier 1 (AT1) bonds<\/strong> after hiring banks to advise on the issuance, Reuters<\/a> reports, citing an arranging document it saw. The bonds will be perpetual and non-callable for 5.5 years, meaning Mashreq can\u2019t redeem them in that period except by paying a penalty.<\/p>\n

Benchmark-sized?<\/strong> A \u201cbenchmark sized\u201d issuance is usually at a minimum valued at USD 500 mn.<\/p>\n

What\u2019s next: <\/strong>Investor meetings start today, according to the newswire.<\/p>\n

Uh,<\/strong> Enterprise, what are AT1 bonds? <\/strong>They\u2019re a common way banks raise core tier-one capital without diluting shareholders by raising equity. Additional tier one certificates (or just \u201cAT1 certificates\u201d) are a form of subordinated debt \u2014 they rank behind other types of bank debt in case of liquidation. That makes them riskier than senior debt, but still prioritizes them above equity holders. AT1 certificates are \u201cperpetual\u201d in that they have no fixed maturity date. They pay interest in much the same way as a bond does, but usually can be converted into equity in some circumstances \u2014 that\u2019s why they\u2019re often called CoCos in the industry, for \u201ccontingent convertibles.\u201d<\/p>\n

CoCos are common in the banking world<\/strong> \u2014 HSBC and Deutsche Bank use them and Standard Chartered announced a USD 1 bn CoCo in February of this year, as did Saudi\u2019s Alinma Bank<\/a> with a USD 1 bn issuance.<\/p>\n

The timing is good for Mashreq: Ratings agency Moody\u2019s has upgraded Mashreq\u2019s <\/strong>long-term deposit and senior <\/strong>unsecured ratings to A3, up from Baa1<\/strong>, assigning it a stable outlook, the lender said in a statement<\/a>. The bank cited its \u201coperational resilience\u201d as well as improvements in credit fundamentals, asset quality, profitability, and robust funding and liquidity profiles for the upgrade. <\/p>\n

ADVISORS- <\/strong>Mashreq has appointed Abu Dhabi Commercial Bank, Al Ahli Bank of Kuwait\u2019s DIFC branch, BofA Securities, Citi, Emirates NBD Capital, FAB, Kamco Investment Company, Mashreq, and Mizuho as joint lead managers and joint bookrunners. <\/p>\n","protected":false},"excerpt":{"rendered":"

Investor meetings are set to take place today<\/p>\n","protected":false},"author":1,"featured_media":92542,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1546],"tags":[159,1391,68,7,288],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-92541","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-debt-watch","tag-banking","tag-debt","tag-debt-watch","tag-enterpriseam-uae","tag-mashreq","wpautop","entry"],"acf":{"mongo_id":"209a156c-03e2-4f8f-8fb4-0a10e4155c42","order":"6","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2024\/2\/2673.jpg","photo_position":"above","homepage_title":"","full_issue_title":"Mashreq Bank taps banks for AT1 bond issuance","related_issue":[92531],"teaser":"Investor meetings are set to take place today","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2024\/5\/.9f311d35-d5b7-48c9-ada5-73a71cdd869f.mp3"},"yoast_head":"\nMashreq Bank taps banks for AT1 bond issuance - 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