ABU DHABI (ALETIHAD)
Mashreq successfully priced a $500 million Additional Tier 1 (AT1) bond offering with a coupon of 6.25% per annum on February 12, 2026, marking the first UAE bank capital transaction of 2026.
The issuance represents Mashreq’s return to the bond markets since its sukuk issuance in April 2025 and was launched to capitalise on favourable market conditions and support its growth trajectory, a press release by the bank said.
The transaction was initially marketed with price thoughts of 6.75%–6.875% for a deal capped at $500 million. Strong early demand allowed the bank to tighten pricing by 62.5 basis points, setting the final yield at 6.25% with a reset margin of +251.6bps.
The order book peaked at $2.1 billion, representing 4.2x oversubscription. This achieved the tightest ever reset margin for Mashreq across its bank capital issuances, including AT1 and Tier 2 instruments.
Mashreq priced the Perpetual Non-Call 5.5-year AT1 bond flat to the secondary market level of its previous AT1 issuance despite a maturity extension of more than 20 months (1.7 years), and inside the secondary market levels of recent AT1 issuances by some of the largest Saudi banks.
Investor demand was geographically diversified, with the MENA region accounting for 67% of the order book, Europe (including the United Kingdom) 22%, and Asia 8% . Real money demand, including banks, private banks and asset managers, represented 81% of the order book, with hedge funds accounting for the remainder.
Mashreq’s Group Chief Executive Officer, 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. The deal’s significant oversubscription, despite market volatility, demonstrates effective execution and will support the bank’s growth through 2026 and beyond.”
Salman Hadi, Mashreq's Group Head of Treasury and Global Markets, who led the issuance, commented: "We had strong conviction in Mashreq’s credit fundamentals, which gave us the confidence to proceed with the transaction ahead of other UAE banks. 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.”
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. 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.”
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.