UAE lender Mashreq has successfully raised $500 million through an additional tier 1 (AT1) bond issuance, bolstering its capital base as it pursues ambitious growth plans for 2026.
The Dubai-listed bank tightened the coupon rate on its perpetual AT1 bonds to 6.25% per annum—down from the initial guidance of 6.75–6.875%—thanks to strong investor demand and favorable market conditions. This marks Mashreq’s return to international debt markets since its sukuk issuance in April 2025 and is the first UAE bank capital deal of 2026.
Investor enthusiasm was clear, with the order book reaching $2.1 billion, more than four times the offering size. The deal also achieved the tightest margin yet for Mashreq’s subordinated capital instruments, highlighting investor confidence despite global market volatility.
AT1 bonds like these are tools banks use to strengthen their capital positions, meet regulatory requirements, and provide a buffer against potential losses. The capital injection will support Mashreq’s ongoing expansion, digital transformation, and regional growth ambitions.
Group CEO Ahmed Abdelaal said the oversubscription demonstrates strong market faith in Mashreq’s fundamentals and long-term vision, positioning the bank for sustainable progress through 2026 and beyond.
Regional investors led the way, with Middle East and North Africa buyers taking 67% of the allocation, followed by European investors at 22% and Asians at 8%—a sign of broad international interest.
Financially, Mashreq posted a 23% decline in net profit to AED6.8 billion ($1.9 billion) in 2025, down from AED8.9 billion the previous year. However, total assets surged 25% year-on-year to AED335 billion, driven by strong balance sheet growth in its UAE operations.
Shares of Mashreq, listed on the Dubai Financial Market, closed 1.1% lower at AED246 on Thursday, and are down 3% so far this year.
