Mashreq, a financial institution in the MENA region, and rated A3 (Moody’s), A (S&P) and A (Fitch), all with a stable outlook, successfully priced a US$500mn Additional Tier 1 bond offering with a coupon of 6.25 percent per annum on Thursday 12th February 2026.
Mashreq decided to capitalize on favorable market conditions and to support its market leading growth trajectory with a new AT1 issuance. The transaction was launched ahead of the Asian Lunar year break, the start of the holy month of Ramadan and expected competing supply from UAE banks, lined up to issue capital securities to replace their existing ones. The issuance further strengthens Mashreq’s robust capital position and optimizes its capital structure, reinforcing the Bank’s ability to sustain its strong growth through 2026.
Following a well-attended global investor call and a couple of days of intensive marketing, Mashreq decided to open the order books on Thursday February 12th, 2026, with initial price thoughts (IPTs) of 6.75% – 6.875% for a transaction sized capped at US$500mn. Large demand early in the process allowed Mashreq to release a book update of >US$1bn, confirming significant momentum and demand from international and regional investors. Mashreq was then able to release a revised guidance, moving 37.5 bps inside of IPTs on the back of an orderbook exceeding US$1.85 bn. Despite the strong move, the orderbook held firm allowing Mashreq to launch the Perpetual Non-Call 5.5-year Additional Tier 1 bond by setting the yield at 6.25% with a reset margin of +251.6bps. The order book peaked at US$ 2.1bn at that stage. This records the tightest ever margin for Mashreq for a subordinated Additional Tier 1 or Tier 2 capital issuance.
Mashreq’s Group Chief Executive Officer, Ahmed Abdelaal, remarked, “We are pleased with the strong investor interest and support for this strategic transaction. This issuance underscores the depth of investor confidence in Mashreq’s credit profile, strategy, and long-term growth prospects. The deal’s significant oversubscription, despite market volatility, demonstrates effective execution and will support the bank’s growth through 2026 and beyond.”
Salman Hadi, Mashreq’s Group Head of Treasury and Global Markets, who led the issuance, commented: “We had strong conviction in Mashreq’s credit fundamentals, which gave us the confidence to proceed with the transaction ahead of other UAE banks. The strategic timing enabled us to benefit from a clear market window, resulting in substantial investor interest who were keen to gain an insight into Mashreq’s market leading growth strategy.”
Norman Tambach, Mashreq’s Group CFO who led the investor marketing effort, said: “The exceptional demand this issuance attracted, from both existing and new investors, is a testament to the strength of Mashreq’s credit profile and the confidence of the global investment community in our strategy. This transaction reinforces our capital base and positions us to accelerate growth as we head into 2026. We remain committed to maintaining an open and ongoing dialogue with our investors as we execute on our ambitions.”.
The investor demand was well distributed across international and regional investors, reaffirming the investor community’s long trust in Mashreq’s credit. MENA region represented majority of the order book at 67%, while Europe (including the United Kingdom) and Asia accounted for 22% and 8% respectively. Real money demand from banks including private banks and high-quality asset managers represented the lion’s share accounting for 81% of the orderbook, while hedge funds accounted for the rest.
The bookrunners for the issuance were Abu Dhabi Commercial Bank, ANZ, BofA Securities, Barclays, Citi, Emirates NBD Capital, First Abu Dhabi Bank, Mashreq, Mizuho and MUFG.
