* Pitching to Qatari banks and in Oman
* Jordan, Malaysia, Turkey also possible
* Sees $25-30 billion of GCC bond issuance this year
* Aims for six or seven deals this year
* Abu Dhabi sovereign could do "strategic" issue
By Rachna Uppal and Stanley Carvalho
ABU DHABI, March 7 National Bank of Abu
Dhabi, the largest lender by market value in the
United Arab Emirates, is set to take on regional mandates to add
to its home-market advantage, the head of the bank's debt
capital markets team said.
The bank is pitching more aggressively for mandates in other
Gulf Arab states, Fawaz Abu Sneineh told Reuters in an interview
"We are trying to diversify outside the UAE, especially in
the FI (financial institutions) space. We are pitching to Qatari
banks, and in Oman," Abu Sneineh said, adding that Jordan,
Malaysia and Turkey were also potential markets, but on a more
"Turkey is very competitive but it is one of our strategic
Until now, large national banks in the Gulf, such as NBAD
and Qatar National Bank, have focused on and tended to
win deals in their respective states. Abu Sneineh said that in
the future, more "regional champions" who understood the Gulf
credit space could help support deals to tap regional liquidity.
"You need one regional champion to be on the transactions to
see the credit story," he said. "We have the relationship
traction, and a full DCM (debt capital markets) platform, from
origination through to secondary trading to credit research."
Gulf bond issuance so far this year has totalled about $4
billion, not including a $4 billion riyal-denominated sukuk, or
Islamic bond, from Saudi Arabia's General Authority for Civil
Aviation issued in January.
Banks have been the largest dollar-denominated bond issuers
so far, but Abu Sneineh said more corporate and quasi-sovereign
issuance was likely in 2012, although he remains cautious on
total volumes for the year.
"The factors driving more bond issuance in the region are
refinancing, expansion plans, and conducive market conditions --
markets are attractive because rates are very low," Abu Sneineh
said, adding demand for regional paper remained strong.
Last year, Gulf Cooperation Council entities tapped bond
markets for just under $26 billion, slightly shy of the previous
year's $30 billion, as the euro zone debt crisis and the Arab
Spring pushed spreads for regional debt wider.
"This year...we may see between $25 billion to $30 billion
of issuance," he said.
NBAD acted as lead arranger on five bond deals last year,
and hopes to increase that in 2012, Abu Sneineh said, including
potentially a sale from the lender itself, which is a frequent
issuer of bonds. "We are hopeful of getting six or seven
transactions this year."
"STRATEGIC" ABU DHABI
Abu Dhabi, the largest and wealthiest emirate in the UAE,
last issued a sovereign bond in 2009; it has since been happy to
allow its government-related companies to tap debt markets.
Quasi-sovereign investment firms such as International Petroleum
Investment Co (IPIC), Mubadala Development Co and Abu
Dhabi National Energy Co are all regular debt issuers,
benefitting to a large extent from implied government backing.
But although the government does not need to raise funding
through this route, a sovereign issue could help set a new yield
benchmark for state-linked entities.
"If Abu Dhabi do a bond issue, it will be strategic, to
update the curve," Abu Sneineh said.
Abu Dhabi has a $1 billion maturity due in August, which the
AA-rated government is unlikely to have any trouble meeting. The
5.5 percent bond was bid at just over 101 on
Tuesday to yield 1.7 percent. The yield is about 40 bps tighter
from Feb. 16 levels, according to Thomson Reuters data.
(Editing by Andrew Torchia)