Al Hilal Bank PJSC, an Islamic lender owned by the Abu Dhabi government, raised $500 million from the sale of perpetual bonds as it seeks funds to boost capital, according to two people familiar with the matter.
The Shariah-compliant securities, which don’t mature, will pay a coupon of 5.5 percent, according to the people, who asked not to be identified because the information is private. Pricing was tightened from an original guidance of about 6 percent as bids of about $5 billion were received, said the people.
Banks in the United Arab Emirates, of which Abu Dhabi is the capital, are selling perpetual bonds to boost core capital as they seek to expand lending. Emirates NBD PJSC, the U.A.E.’s second-biggest bank by assets, and Dubai Islamic Bank PJSC are among lenders that sold perpetual securities last year.
Bond sales from the six-nation Gulf Cooperation Council, which includes the U.A.E. and Qatar, have surged in June as average yields in the region neared their lowest, according to JPMorgan Chase & Co. indexes. Sales this year have exceeded $22 billion, the biggest first half on record.
Emirates Telecommunications Corp., the U.A.E.’s largest phone company, raised more than $4.2 billion this month in the region’s biggest corporate bond issue to fund an acquisition.
Al Hilal Bank, Citigroup Inc., Emirates NBD Capital Ltd., HSBC Holdings Plc, National Bank of Abu Dhabi PJSC and Standard Chartered Plc managed Al Hilal’s bond sale. The lender has the fifth-highest investment grade rating at Moody’s Investors Service.