NBAD has called a shareholders' meeting to approve the Medium Term Note programme, a proposal to allow foreigners to hold up to 25 percent of the bank's shares and a convertible bond issue - all designed to support the bank's growth strategy.
"We are poised for bigger growth. We are looking at growth domestically and overseas and we need to maintain our capital adequacy ratios," Jamil Halabi, NBAD's head of finance told Reuters in Dubai. "We want to borrow overseas because we are not just a UAE bank. We have an international presence," he said.
Gulf Arab banks are increasingly borrowing overseas as they search for longer-term funds to match growing exposure to the region's booming mortgage and project finance markets.
Halabi said the eurobond would be issued before the end of the year but declined to speculate on the exact timing or size of the first tranche. The extraordinary meeting of shareholders is scheduled for November 22.
NBAD mandated Barclays and CSFB to lead manage the eurobond issue, a source at one of the lead managers said on Tuesday.
Apart from the eurobond, the bank plans to issue up to 2.5 billion dirhams ($680.6 million) in 10-year subordinated notes giving holders the option to convert them into NBAD shares which are up just over 200 percent this year.
"The notes will qualify as Tier 2 capital," said Halabi. Tier II capital is secondary bank capital and usually includes items such as subordinated term debt, general loss reserves and undisclosed reserves.