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ADCB issues $157m MTN programme to diversify resources

ABU DHABI — Abu Dhabi Commercial Bank (ADCB), country’s third largest bank by assets, has launched a transaction for a minimum of Malaysian Ringgit 500 million ($157.2m) of its MYR 3.5 billion Medium Term Note Programme, in order to diversify its financial resources.

The transaction which will be concluded in the first week of September, is being arranged by Standard Chartered Bank and Malaysia’s RHB Investment Bank. Malaysia’s RAM Rating Services Berhad or RAM Ratings has maintained AAA and P1 ratings, the highest long and short-term financial institution ratings.

In its assessment the independent rating agency said that ‘comfort is drawn from ADCB’s strong capitalisation levels’. It also highlighted Bank’s strong connection to the governments
 of Abu Dhabi.

In 2009, Abu Dhabi Commercial Bank became the first GGC bank to issue debt to investors in the United States in reliance on Rule 144A of the United States Securities Act of 1933.

Ala’a Eraiqat, Chief Executive Officer of ADCB said that RAM Ratings plays a leading role in providing independent credit opinions that are respected by investors and other market participants.

Kevin Taylor, ADCB’s Group Treasurer said that the deal will be a good source of five year funding well within bank’s cost of funds. “ADCB’s liquidity position remains strong having raised more than Dh10 billion of new customer liabilities in 2010 and operating with a loans to stable resources ratio as defined by the UAE Central Bank of 91 per cent, at the end of the second quarter,” the treasurer said.

The Notes will contribute to reopening capital markets for ADCB and
 other UAE.

Taylor termed it a reaffirmation of the ADCB and the Abu Dhabi
 credit stories.

The second largest bank in Abu Dhabi, ADCB booked a net loss of Dh306 million in the first six months of the year, as the financial institution took significant impairment on its exposure to Dubai World that eroded its earnings in second quarter.

However, total operating income for the first half increased by seven per cent reaching Dh2.480 billion, which is mainly attributed to interest income that rose 11 per cent year-on-year and higher revenue generation from associated firms which rose to Dh194 million.— haseeb@khaleejtimes.com