* Tier one bond sale to help improve capital ratios
* Bank picks BofA, DB, M.Stanley, HSBC, ING and itself for
* Roadshows scheduled May 20-22 in Asia, London and UAE
(Adds roadshow details, background)
By Rachna Uppal and Mala Pancholia
DUBAI, May 16 Emirates NBD (ENBD),
Dubai's biggest lender, plans to tap global debt markets for its
first capital-boosting bond issue, as Gulf banks take advantage
of tight pricing and high investor demand to shore up capital
ENBD, which has already raised Tier 2, or supplementary
capital, this year, has hired six banks, including its own
investment banking unit, to arrange a Tier 1 bond issue, lead
managers arranging the deal said on Thursday.
Tier 1 capital is a lender's core capital as defined under
the Basel banking industry rules, and a key measure of its
financial strength. Gulf banks will need to comply with tighter
Basel III global standards for core capital, which will be
introduced gradually over coming years.
ENBD's Tier 1 solvency ratio stood at 13.5 percent of assets
at the end of March.
The company plans to meet investors on roadshows in Asia,
London and the United Arab Emirates between May 20-22 ahead of
issuing the bond, a statement from arranging banks said.
Bank of America Merrill Lynch, Deutsche Bank
, HSBC Holdings, ING and Morgan
Stanley as well as Emirates NBD's investment banking unit
are arranging the investor meetings.
Although benefiting from enviable capital adequacy ratios
compared to many lenders in the developed world, banks in the
United Arab Emirates have in recent months sought to boost their
capital ratios to support future growth and repair balance
sheets impacted by Dubai's 2009 debt crisis.
Both Abu Dhabi Islamic Bank and Dubai Islamic Bank
have sold Tier 1-boosting Islamic bonds in recent
months- the ADIB issue being the first such sharia-compliant
offering ever from the region.
However, non-Islamic banks in the Gulf have largely shied
away from such deals. Commercial Bank of Qatar has
appointed banks to sell a bond, sources told Reuters last month,
but it has yet to come to market.
UAE banks have also focussed on repaying the 70 billion
dirhams of systematic support the UAE government placed with the
country's banks in the wake of the global financial crisis.
Both Abu Dhabi Commercial Bank and ENBD have sold
bonds which boost Tier 2 capital to replace the government
instruments, while other banks have used their cash reserves to
In April Emirates NBD repaid 3 billion dirhams ($816.8
million) out of the 12.6 billion dirhams of government support.
(Additional reporting by David French; Editing by Dinesh Nair
and Greg Mahlich)