Dubai – Mubasher: Mashreq Bank has successfully priced a $500 million Additional Tier 1 bond offering with a coupon of 6.25% per annum on Thursday, 12 February 2026.
The transaction was expected to see competing supply from UAE banks, lined up to issue capital securities to replace their existing ones, according to a press release.
The issuance further strengthens the bank’s robust capital position and optimizes its capital structure while reinforcing its ability to sustain strong growth through 2026.
The investor demand was well distributed across international and regional investors, with MENA region representing majority of the order book at 67%, while Europe (including the UK) and Asia accounted for 22% and 8% respectively.
Real money demand from banks including private banks and high-quality asset managers represented the lion’s share accounting for 81% of the orderbook, while hedge funds accounted for the rest.
Mashreq Bank decided to capitalize on favorable market conditions and to support its market leading growth trajectory with a new AT1 issuance, as it decided to open the order books with initial price thoughts (IPTs) of 6.75% - 6.875% for a transaction sized capped at $500 million.
Large demand early in the process allowed the bank to release a book update of >$1 billion, confirming significant momentum and demand from international and regional investors. It was then able to release a revised guidance, moving 37.5 bps inside of IPTs on the back of an orderbook exceeding $1.85 billion.
Despite the strong move, the orderbook held firm allowing Mashreq Bank to launch the Perpetual Non-Call 5.5-year Additional Tier 1 bond by setting the yield at 6.25% with a reset margin of +251.6bps.
The order book peaked at $2.10 billion at that stage, recording the tightest ever margin for Mashreq Bank for a subordinated Additional Tier 1 or Tier 2 capital issuance.
Group CEO of Mashreq Bank, Ahmed Abdelaal, said: “We are pleased with the strong investor interest and support for this strategic transaction. This issuance underscores the depth of investor confidence in Mashreq’s credit profile, strategy, and long-term growth prospects.”
Abdelaal noted: “The deal’s significant oversubscription, despite market volatility, demonstrates effective execution and will support the bank’s growth through 2026 and beyond.”
Meanwhile, Salman Hadi, Mashreq's Group Head of Treasury and Global Markets, who led the issuance, said: "We had strong conviction in Mashreq’s credit fundamentals, which gave us the confidence to proceed with the transaction ahead of other UAE banks.”
Hadi concluded: “The strategic timing enabled us to benefit from a clear market window, resulting in substantial investor interest who were keen to gain an insight into Mashreq’s market leading growth strategy."
From their part, Norman Tambach, Mashreq’s Group CFO, who led the investor marketing effort, said: “The exceptional demand this issuance attracted, from both existing and new investors, is a testament to the strength of Mashreq's credit profile and the confidence of the global investment community in our strategy.”
Tambach added: “This transaction reinforces our capital base and positions us to accelerate growth as we head into 2026. We remain committed to maintaining an open and ongoing dialogue with our investors as we execute on our ambitions.”
It is worth noting that the bookrunners for the issuance were Abu Dhabi Commercial Bank, ANZ, BofA Securities, Barclays, Citi, Emirates NBD Capital, First Abu Dhabi Bank, Mashreq, Mizuho and MUFG.
In 2025, Mashreq Bank recorded net profits after tax worth AED 6.97 billion, while the total assets hit AED 334.63 billion.
