RIYADH: In a significant step to support the UAE’s net-zero goal, Abu Dhabi Commercial Bank said it has successfully priced a $650 million green bond, with the proceeds designated for financing eligible sustainable assets.
The issuance, which was priced with a 5.50 percent coupon rate, featuring a spread of 125 basis points above US treasuries, aligns with ADCB’s Green Bond Framework.
It was oversubscribed by 2.9 times, drawing interest from local, regional, and international investors, with total orders exceeding $1.9 billion.
The demand underscores the market’s confidence in ADCB’s creditworthiness and the attractiveness of the bank’s sustainability initiatives, according to a statement.
This marks ADCB’s second environmental issuance, following its inaugural $500 million green bond 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 solid credit ratings of A/Stable/A-1 from S&P and A+/Stable/F1 from Fitch, as well as its strong ESG ratings with a "AA" rating from MSCI and a "Medium risk" categorization by Sustainalytics, support the green bond’s competitive pricing.
“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.
The bank has pledged to offer 35 billion dirhams ($9.53 billion) in green financing by 2030, which is tied to this issuance.
According to the ADCB’s Green Bond Framework, the funds will be utilized to finance approved green projects.
The qualifying green credit portfolio of ADCB had grown noticeably year over year by 61 percent as of June 30, 2023, reaching $1.65 billion.
Green buildings make up 55 percent of the portfolio’s components, with renewable energy accounting for 26 percent.