Mashreqbank has successfully completed a $500 million perpetual Additional Tier 1 (AT1) capital issuance after attracting investor demand that exceeded $1 billion, allowing the Dubai-based lender to price the deal tighter than initial guidance.
The perpetual non-call 5.5-year securities were issued at par and carry a fixed annual coupon of 6.625%, translating into a yield of 6.625% and a spread of 242 basis points over U.S. Treasuries.
Initial price thoughts had been set around 6.875%, but strong participation from investors enabled the bank to reduce the final pricing. The transaction generated an order book of more than $1 billion, including approximately $85 million in commitments from the joint lead managers, with no hedge-related orders.
The securities are scheduled to be issued on July 7, 2026, with the first call option available on July 7, 2031.
The transaction is being managed by Abu Dhabi Commercial Bank, BBVA, Barclays, Bank of America, Crédit Agricole, Emirates NBD Capital, First Abu Dhabi Bank, Mashreq and Standard Chartered, while Bank of America is serving as the billing and delivery bank.
Following issuance, the AT1 notes will be listed on Euronext Dublin’s Global Exchange Market.
The latest capital raise closely follows Mashreqbank’s return to the AT1 market earlier this year, when it also secured $500 million through a similar issuance carrying a 6.25% coupon. The lender currently holds long-term credit ratings of A3 with a stable outlook from Moody’s, and A with stable outlooks from both S&P Global Ratings and Fitch Ratings.
