In response to the government’s initiative to inject additional capital into certain financial institutions in the country, National Bank of Abu Dhabi has announced that it plans to issue tier one capital notes to the government, with a principal amount of AED4 billion.
The issuance of the notes has been approved by National Bank of Abu Dhabi’s (NBAD’s) board of directors and will be subject to obtaining shareholder approval.
The notes will bear interest at a fixed rate of 6% per annum payable semi-annually in arrears from the issue date for a period of five years and thereafter at a floating rate, reset and payable semi-annually in arrears, reflecting the initial margin above the then prevailing six-month Emirates interbank offered rate. The notes are non-voting, non-cumulative perpetual securities, and are callable subject to certain conditions.
Michael Tomalin, CEO of NBAD, said: This will increase NBAD’s capital resources by AED4 billion and would take our tier one ratio as at December 31, 2008 to 16%. NBAD’s combined capital ratio after the addition of this non-cumulative perpetual capital instrument which is callable by the issuer, would become 18.7% as at December 31, 2008 giving us one of the strongest capital ratios among global banks.
