ADCB buys back, re-issues 1 bln dirhams in bonds

According to the Chief Executive of the Abu Dhabi Commercial Bank, the bank shall buy back and reissue about 1 billion dirhams ($272.3 million) in bonds due later this year in order to manage its liquidity.

The bank, has also retained Standard Chartered (SCBEF. PK - news - people) as the sole manager for these issues.

About the buy back and reissue of bonds, Ala Eraiqat, Chief Executive of Abu Dhabi Commercial Bank, said: "We retired them and renewed the bonds. The deal was struck before maturity to manage the liquidity."

During 2007, the bank issued 2.1 billion dirhams in bonds, which had a two-year maturity and with coupon rate of 52 basis points above the Emirates Inter-bank Offer Rate

It extended the maturity of the 2007 bonds, instead of raising additional money.

The maturity was extended by the bank by buying back half of the paper value of the bonds, which is about 1 billion dirhams, and by issuing fresh debt, which would mature in 2011. With this, the spread would be four times higher at 250 basis points above EIBOR and is following the present trends of the market.