Dubai-based Mashreqbank PSC (Mashreq) has priced a CNH1 billion ($139 million) three-year senior unsecured Dim Sum bond at a fixed coupon of 2.50%, the bank’s first public issuance in the offshore renminbi market.
The pricing came inside initial price guidance in the 2.95% area, Zawya reported. Mashreq gave details of the pricing in a statement on October 15.
Mashreq announced the transaction on October 13 and held a one-day virtual investor marketing exercise with one-on-one and group meetings. The meetings focused on the bank’s financial performance, funding strategy and its engagement with Asian markets.
The order book opened the following day and peaked at CNH2.3 billion, more than two times the amount issued. The bank said demand came from regional and international investors.
Mashreq said the two-day execution allowed it to maintain pricing discipline while limiting its exposure to market volatility.
“Our inaugural Dim Sum bond marks an important milestone in Mashreq’s funding diversification strategy,” Ahmed Abdelaal, Mashreq’s Group Chief Executive Officer, said in the statement.
Salman Hadi, the bank’s Group Head of Treasury and Global Markets, said the issuance “establishes an important new funding channel and further broadens Mashreq’s international investor base.”
The bond is expected to be listed on the Luxembourg Stock Exchange and Nasdaq Dubai. It was structured to settle through Euroclear and Clearstream, with links to Hong Kong’s Central Moneymarkets Unit.
Bank of China, China International Capital Corporation, China Securities Co., Guotai Junan International, Industrial and Commercial Bank of China and Standard Chartered acted as joint lead managers and bookrunners, Khaleej Times reported.
Mashreq said the deal reflects growing trade, investment and financial ties between the UAE, China and Hong Kong, including cooperation under the Belt and Road Initiative.
Dim Sum bonds are denominated in offshore Chinese yuan, which trades under the code CNH.
