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Friday, 10 April 2009

Emirates NBD offers bond swap (Update 1)

Emirates NBD, the nation’s largest bank by assets, is offering investors the opportunity to swap existing bonds to shorter-term, more senior paper to help the bank bolster its balance sheet and meet capital requirements by the Central Bank.

Emirates NBD needs to bolster its balance sheet, notably its Tier 1 capital, by the end of June to comply with the new requirements. The Central Bank demands that 11 per cent of a banks’ assets are Tier 1 equity. This regulation, known as capital adequacy, measures financial strength.

“From this transaction, we can improve our Tier 1 capital position while investors are in higher-value securities,” said Rick Pudner, the chief executive of Emirates NBD.

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