Mashreq has started the UAE banking sector’s capital market activity for 2026 by raising $500 million through an Additional Tier 1 (AT1) bond. This is the first such deal by a UAE bank this year, indicating that investors have strong faith in the country’s financial system.
The Dubai-based bank, which has a stable outlook from Moody’s (A3) and S&P (A) and Fitch (A), set the coupon rate for the 5.5-year bond at 6.25% each year. Investors from the Middle East, Europe, and Asia were very interested in the deal, and the order book peaked at $2.1 billion, which is more than four times what Mashreq wanted to raise.
An AT1 bond is a type of the capital that helps a bank’s financial buffer. It is meant to be cover losses when necessary and helps lenders fulfil regulatory capital requirements while still supporting lending and growth. By issuing this bond, Mashreq has effectively strengthened its balance sheet and given itself more financial freedom to the support growth in the coming year.
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