In a crucial step toward the UAE's net-zero target, Abu Dhabi Commercial Bank announced the successful pricing of a $650 million green bond, the proceeds of which would be used to finance qualifying sustainable assets. The offering, which was priced with a 5.50 percent interest rate and a 125 basis point spread over US treasuries, is consistent with ADCB's Green Bond Framework.
It was 2.9 times oversubscribed, attracting local, regional, and worldwide investors, with total orders topping $1.9 billion. The demand demonstrates the market's trust in ADCB's creditworthiness as well as the appeal of the bank's environmental initiatives.
This is ADCB's second environmental offering, following the $500 million green bond it issued in September 2022.
“ADCB’s second green bond issuance is a significant development in the delivery of our climate strategy, which is aimed at financing solutions to tackle climate change in support of the UAE Net Zero by 2050 Strategic Initiative,” Ala’a Eraiqat, group CEO said.
“As the UAE prepares to host COP28, ADCB stands ready to support customers on their path to success in a net zero economy,” he continued.
The Bank's outstanding credit ratings of A/Stable/A-1 from S&P and A+/Stable/F1 from Fitch, as well as its good ESG ratings of "AA" from MSCI and "Medium risk" from Sustainalytics, underpin the green bond's competitive price.
“We were very pleased with the pricing achieved for our second green bond – this is a strong endorsement of our increasingly ambitious climate strategy and our credit quality,” Robbert Muller, group treasurer of ADCB commented.
“It is also encouraging to see orders from a diverse group of global investors, reflecting confidence in ADCB and its approach to managing ESG risks and opportunities,” Muller added.