FAB secures strong demand for five-year bond

First Abu Dhabi Bank PJSC has priced a $750 million five-year senior unsecured Eurobond under Regulation S, drawing strong investor demand and tightening pricing well inside initial guidance as global credit markets show continued appetite for high-grade Gulf issuers.

The fixed-rate bond carries a coupon and yield of 4.299%, with a re-offer price set at par. The notes were marketed with initial price thoughts at 95 basis points over US Treasuries before being tightened to a final spread of 60 basis points, reflecting the strength of demand through the book-building process. Orders exceeded $2.8 billion, excluding joint lead managers, giving the transaction a cover of nearly four times.

The issuance underscores the standing of First Abu Dhabi Bank PJSC in international debt markets and highlights continued investor confidence in the credit quality of the largest bank by assets in the United Arab Emirates. Market participants said the book composition included a broad mix of global asset managers, banks, private banks and institutional accounts from Europe, Asia and the Middle East, a distribution that allowed the issuer to tighten pricing without sacrificing depth or diversity.

Senior unsecured bonds from leading Gulf banks have benefited from a combination of strong capitalisation, high liquidity buffers and supportive operating environments. FAB’s balance sheet is anchored by solid profitability and a diversified earnings base spanning corporate, investment and retail banking, while its links to sovereign and quasi-sovereign clients provide additional stability. Ratings agencies continue to view the bank as closely aligned with Abu Dhabi’s economic fundamentals, a factor that typically supports tighter spreads in volatile markets.

The five-year tenor was seen as a strategic choice, offering investors duration without extending too far along the curve at a time when expectations around the path of US interest rates remain finely balanced. While Treasury yields have fluctuated in response to macroeconomic data and central bank signals, high-grade issuers with clear credit stories have been able to access capital at competitive levels, particularly when transactions are well-timed and clearly communicated to investors.

The tightening from initial guidance to final pricing illustrates the depth of demand for bank paper from the Gulf, especially for issuers with established track records in international markets. Bankers involved in the deal said the rapid build-up of the order book allowed leads to move pricing swiftly, with limited resistance from investors given the relative value on offer compared with similarly rated peers in other regions.

FAB has been a regular issuer in global bond markets, using benchmark-sized transactions to diversify its funding base and extend maturity profiles. Proceeds from such deals are typically used for general corporate purposes, including refinancing existing obligations and supporting balance-sheet growth. The bank’s funding strategy has emphasised a mix of currencies and maturities, allowing it to manage interest-rate risk and maintain flexibility amid changing market conditions.

The transaction also reflects broader trends in the Gulf’s debt capital markets, where banks and corporates have continued to tap international investors to fund expansion and manage liquidity. Regulatory frameworks, including the use of Regulation S formats, have facilitated access to a wide pool of offshore capital while maintaining compliance with global disclosure standards.

Investor appetite has been supported by the region’s resilient economic outlook, underpinned by government spending, infrastructure investment and diversification initiatives. For banks, this has translated into steady loan growth, improving asset quality and robust capital ratios, factors that are closely scrutinised by fixed-income investors assessing risk-adjusted returns.