ENBD sets price guidance for yuan bond

Price guidance for a 3-year benchmark yuan bond from Dubai lender Emirates NBD is in the 5 per cent area with final pricing expected later on Monday, leads said. HSBC and Standard Chartered are bookrunners on the deal, whose book is already in excess of 1.5 billion yuan ($238.16 million). ENBD is planning to raise as much as 750 million yuan ($119.08 million) from the bond sale, according to leads. Emirates NBD has announced price guidance at 4.875 per cent to 5 per cent for a Renminbi-denominated three-year bond via Standard Chartered, HSBC, and its own unit Emirates NBD Capital. The potential issue from ENBD - Dubai’s largest bank by market value and majority government-owned - is the Gulf Arab region’s first yuan bond, reflecting the growing importance of bilateral ties with China and giving a further boost for yuan-denominated issuance in international markets. Benchmark bonds are typically at least 500 million in size. ENBD had picked HSBC, Standard Chartered, and its own unit, ENBD Capital, to run the roadshows, which took place from Feb.22 and were held in Hong Kong and Singapore. The bank would be following in the footsteps of McDonalds, Volkswagen and UK retailer Tesco, which have all issued offshore bonds issued in yuan in the last year. There has been a consistent growth in bilateral economic and financial cooperation between China and the United Arab Emirates. In January, China signed a bilateral currency swap agreement with the UAE worth 35 billion yuan ($5.5 billion), China’s first currency swap deal in the Middle East, in a move to boost two-way trade and investment. The A3/A+ rated Dubai lender met investors in late February in Hong Kong and Singapore. This renminbi deal would be the first in the Chinese currency from any Gulf-based institution. ENBD is expected to swap the proceeds back into dollars, meaning the Dim Sum debut is not a currency diversification playbut rather an attempt to engage a broader range of investors. Meanwhile Emirates NBD announced on Monday that it has successfully completed the first phase of integrating Dubai Bank’s Automated Teller Machine (ATM) network into the Emirates NBD Group. The new single platform will enable Dubai Bank customers to access free of charge over 800 ATMs across the UAE, significantly enhancing convenience for all customers of the Emirates NBD Group. In 2011, Emirates NBD completed the acquisition of Dubai Bank, making it a wholly owned subsidiary of Emirates NBD Group. Following the takeover, an Integration Committee was established to oversee the assimilation of Dubai Bank into the Group. Technology and interoperability have been a major focus area for the committee, and the integration of the Dubai Bank ATM network is the first major milestone to be reached in the ongoing integration programme. “Today’s announcement is very important and represents a significant milestone in the integration of Dubai Bank within Emirates NBD Group,” said Rick Pudner, Group CEO at Emirates NBD. “Dubai Bank’s customers can now enjoy access to a hugely expanded ATM network, further enhancing the bank’s ability to meet the evolving needs of its retail customers. At the same time, customers of Emirates NBD and Emirates Islamic Bank can benefit from free access to Dubai Bank’s conveniently located ATMs.” Dubai Bank currently operates 41 ATM machines across the country. With their integration into a network that encompasses the banks of Emirates NBD and Emirates Islamic Bank, the resulting unified platform will now allow customers of all three banks to use an enlarged ATM network to access their accounts and carry out a wide range of banking and payment transactions. In the coming months, Emirates NBD will complete the next phase of integration which will enable Dubai Bank customers to access payment options, such as utility bill payments, when using Emirates NBD ATMs, and vice versa. Since its launch in September 2002, Dubai Bank has placed service, transparency and convenience at the forefront of its operations, introducing a wide range of unique products and services to the market. On Jan.1, 2007, Dubai Bank was converted into a Shari’a-compliant financial institution.