Union National Bank's $400m bond successful in tough market

Abu Dhabi-based Union National Bank yesterday announced that it successfully completed its $400 million (Dh1.4 billion) bond issue. In its first new bond issuance since 2005 Union National Bank, rated A1 by Moody's and A+ by Fitch, priced its five-year bond due in November 2016 under its $3 billion Euro Medium Term Note Programme. International banks such as Deutsche Bank, HSBC, National Bank of Abu Dhabi and Standard Chartered Bank were joint-lead managers and joint-bookrunners and Commerzbank AG was the co-lead manager. The transaction was priced at a coupon of 3.875 per cent with a spread of +287.5 basis points over the Dollar five-year mid swaps, UNB said in a statement yesterday. The order books opened midday London time on November 31. Despite the news of a Greek referendum released late on Tuesday evening causing great nervousness in the markets, the order books continued to grow steadily and the transaction was priced in the afternoon. Ahead of the bond issue, road shows were held in key financial centres such as Abu Dhabi, Dubai, Hong Kong, Riyadh, Singapore and London. About 62 per cent of the issue was subscribed by Middle East investors while 27 per cent was taken up by European investors and 11 per cent was placed in Asia. Banks subscribed to 69 per cent of the issue while the remaining distribution by investor-type was private banks, 15 per cent, fund managers 14 per cent and insurance companies two per cent.