The deal provides tier 2 capital to the bank and gives bondholders the right but not the obligation to convert the bonds into shares at a preordained price.
Local investors were the bonds’ biggest buyers, accounting for 70% of the paper. Another 4% was placed with Gulf investors outside the UAE, while the rest was bought by non-Gulf accounts, predominantly in Europe. With the dirham pegged to the dollar at a rate of 3.67, the bond has minimal currency risk for international investors.
The convertibility option is a stepped price structure and kicks in at the end of the second year if the bank’s share price is at least Dh42.
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