RAKBANK issues USD250M Tier 2 bonds amid strong investor demand
(MENAFN) On Wednesday, Ras Al Khaimah National bank (RAKBANK) successfully completed its inaugural issuance of Tier 2 bonds, raising USD250 million with a maturity term of 10.25 years. The bank announced that these bonds, which are non-callable for the first 5.25 years, carry an interest rate of 5.875 percent. This issuance marks a significant milestone for RAKBANK as it diversifies its funding sources and strengthens its capital base.
The bond issuance saw a remarkable response from investors, with demand exceeding expectations by four times. The total orders reached over USD1 billion, demonstrating a high level of interest and confidence in RAKBANK's financial health and future growth prospects. This strong oversubscription is indicative of the bank’s solid standing in the financial market and the attractive nature of the bond offering.
As a result of the substantial investor interest, RAKBANK was able to achieve a reduction in the bond spread by 42.5 basis points. This favorable adjustment reflects not only the market’s positive outlook on the bank's stability but also its robust growth trajectory. The successful issuance of these bonds is expected to enhance RAKBANK’s capital structure and support its strategic objectives moving forward.
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