* ENBD keeping bond options open, timing key-CEO
* Could confirm banks this week for possible issue - sources
* Bank has issued $500 mln in 2011 in private placements -
By David French
DUBAI, Nov 28 Emirates NBD,
Dubai's largest bank by assets, is considering tapping the
Islamic bond, or sukuk, market for the first time as the bank
becomes the latest Gulf financial institution to target
Chief Executive Rick Pudner said on Monday the lender is
eyeing a five-year, dollar-denominated issue.
"Like everyone, we are looking at the opportunities in the
sukuk arena and we're just reviewing our options," Pudner told
reporters on the sidelines of a company event.
"We are looking at five-year but the size we are not sure.
We will determine that over the next week or two weeks."
Emirates NBD could mandate banks as early as this week, four
banking sources had earlier told Reuters.
The sources, speaking on condition of anonymity, said ENBD
has drawn up a shortlist of seven or eight banks from which it
will select the institutions which will manage the sale.
This list includes National Bank of Abu Dhabi,
Standard Chartered, HSBC, Citi, Royal
Bank of Scotland and ENBD itself.
"We haven't mandated any banks yet," Pudner said. "There
were quite a few issues recently so we have decided to wait a
little bit and see what the right timing is for going into the
Both conventional and Islamic institutions, as well as
global sovereigns such as Bahrain and Indonesia, have been
flocking to the sukuk market recently, creating an unusually
active fourth quarter.
Both Abu Dhabi Commercial Bank and Abu Dhabi
Islamic Bank have printed $500 million five-year sukuk
in the last two weeks, pricing at a spread over midswaps of 275
basis points and 245 basis points respectively.
Sources said there would be strong regional interest in any
print but selling the bank to international investors could be
"First and foremost they would have to give a clinical
assessment of their loan book and sell it to investors. If they
pay up, regional accounts will buy but international accounts
will probably pass regardless of the pricing," said a fixed
income fund manager.
"It will be a very good move for the bank to re-establish
access and a price point. I think they will probably do a
smaller deal followed by a big one later on."
NO SYRIA SANCTIONS DIRECTIVE YET
Investors will be looking for more information on the impact
that Dubai Bank -- which was merged with Emirates NBD in October
at the Dubai ruler's behest -- will have on the bank and how it
will be integrated into ENBD.
Emirates NBD has issued around $500 million in
privately-placed paper so far in 2011, with all of it sold to
European investors, a Gulf-based banking source said.
One of the largest, with an issue date of Nov. 3, was a $163
million two-year bond which priced at 140 basis points over the
three-month London interbank offered rate with a 1.832 percent
coupon through sole bookrunner Commerzbank.
The quarterly putable bond, which means investors can ask
for the cash to be repaid every three months, achieved a good
price in the volatile environment, a separate banker said.
In May, Emirates NBD, which has about $2.18 billion in debt
maturities in 2012, completed a debt swap for two existing notes
due to expire in 2016 for longer-term debt. It has repeatedly
said it would not overpay for issuing new debt, and pricing
levels so far this year had been too expensive.
When asked about sanctions on Syria by the Arab League,
Pudner said: "We haven't seen any guidance yet. Maybe we will
get some in the near future."
The Arab League approved unprecedented economic sanctions
against Syria, isolating President Bashar al-Assad's government
over its eight-month crackdown on protests against his rule.
The sanctions include a travel ban on top Syrian officials
and a freeze on assets related to Assad's government and are
aimed at halting dealings with Syria's central bank and
investment in the country.
Emirates NBD shares closed up 1.2 percent on the Dubai
bourse on Monday and are up nearly 20 percent this