gcc fixed income chart book: fy 2016 review

1

GCC Fixed Income Chart Book: FY 2016 Review

09 January, 2017

Chavan Bhogaita / Rakesh Sahu

Market Insights & Strategy

NBAD Global Markets

22

To the fullest extent allowed by applicable laws and regulations, National Bank of Abu Dhabi PJSC (the “Bank”) and any otheraffiliate or subsidiary of the Bank, expressly disclaim all warranties and representations in respect of this communication. Thecontent is confidential and is provided for your information purposes only on an “as is” and “as available” basis and noliability is accepted for or representation is made by the Bank in respect of the quality, completeness or accuracy of theinformation and the Bank has undertaken no independent verification in relation thereto nor is it under any duty to do sowhether prepared in part or in full by the Bank or any third party. Furthermore, the Bank shall be under no obligation toprovide you with any change or update in relation to said content. It is not intended for distribution to private investors orprivate clients and is not intended to be relied upon as advice; whether financial, legal, tax or otherwise. To the extent thatyou deem necessary to obtain such advice, you should consult with your independent advisors. Any content has beenprepared by personnel of the Global Markets at the Bank and does not reflect the views of the Bank as a whole or otherpersonnel of the Bank.

Disclaimer

33

Welcome to our FY 2016 chart book for the GCC fixed income market. The idea is very simple – to give those of you who follow this market a quick snapshot of some of the key points in terms of the following:

Overview of spread performance in this market during FY 2016

Primary Market issuance (and performance of these deals since they were printed)

Secondary Market performance of key instruments (snapshot from 31st December 2015 to 30th December 2016)

We have deliberately made the report text-light in an attempt to make it easier to digest. Hopefully you will find it both interesting and useful.

If you have any feedback on the report, or indeed would like to discuss any of the points highlighted, please do contact me.

Regards,

Chavan BhogaitaManaging Director & Head of Market Insights & StrategyGlobal [email protected]+971 2 6110 127

Foreword

44

2016 was a year of Black s wan events…

2016 certainly taught us all to expect the unexpected. The various black swan events that we witnessed throughout the year generated plenty of volatility inthe global rates space with some record moves. The 10-year treasury yield gyrated in a range of 130 basis points, starting the year at around 2.27%, ittouched an all-time low of 1.32% on July 6, a few days after the UK’s decision to leave the EU, and then started moving up gradually making a sharp jumpfollowing the US election results, and touched a two-year high of 2.64% on 15 Dec as the Fed announced its second rate hike in a decade.

Note: Interest Rate Volatility refers to Credit Suisse Interest Rate Volatility Index estimate as available on Bloomberg; G7 Sovereign Composite Bond Index (BG7SOV Index) is maintained by Bloomberg and includes all sovereign bonds issued by a G7 country: Source: Bloomberg; NBAD

1.30

1.40

1.50

1.60

1.70

1.80

1.90

2.00

2.10

2.20

2.30

2.40

2.50

2.60

2.70

55

60

65

70

75

80

85

90

95

100

31

-De

c-1

5

31

-Jan

-16

29

-Fe

b-1

6

31

-Mar

-16

30

-Ap

r-1

6

31

-May

-16

30

-Ju

n-1

6

31

-Ju

l-1

6

31

-Au

g-1

6

30

-Se

p-1

6

31

-Oct

-16

30

-No

v-1

6

31

-De

c-1

6

Interest Rate Volatility (LHS) 10-Yr Treasury Yield in % (RHS)

10-Year US Treasury Note Yield & Interest Rate Volatility

The Brexit vote shook investor confidence and

prompted a massive risk-off

move; 10Y Treasury hit all-

time low

Bonds sold-off after US election

results & hit a year-high onDec 15 as the Fed hike rates

Stocks sold-off & Oil price crashed on concerns of a slowdown in China and prompted flight to safe assets

Brexit

China

US electionresult

ItalyReferen-

dum0

15

30

45

60

75

90

105

0

15

30

45

60

75

90

105

Dec

-14

Feb

-15

Ap

r-1

5

Jun

-15

Au

g-1

5

Oct

-15

Dec

-15

Feb

-16

Ap

r-1

6

Jun

-16

Au

g-1

6

Oct

-16

Dec

-16

Fed's 90 Day AACommercial Paper Rate

3-Month USD LIBOR

3M US$ LIBOR & Commercial Paper Rate (in bps)

…but almost doubled in

2H 2016

Short-term rates were flat

in 1H 2016…

104

106

108

110

112

114

116

118

120

122

124

104

106

108

110

112

114

116

118

120

122

124

Dec

-15

Jan

-16

Feb

-16

Mar

-16

Ap

r-1

6

May

-16

Jun

-16

Jul-

16

Au

g-1

6

Sep

-16

Oct

-16

No

v-1

6

Dec

-16

G7 Sov. Composite Bond Index (index value)

Sharp decline in

bond value

55

… and big moves in negative yielding bonds

Note: * Dec-16 data is as at 5th Dec and this is the latest value available; Global Aggregate Negative Yielding Debt Value is as per the Bloomberg Barclays Global Agg Negative Yielding Debt Total Return Index (unhedged bond values in USD), a subset of Bloomberg Barclays Global Aggregate Index which is a flagship measure of global investment grade debt from twenty-four local currency markets. This multi-currency benchmark includes treasury, government-related, corporate and securitized fixed-rate bonds from both developed and emerging markets issuers; Source: Bloomberg; NBAD

-0.70

-0.60

-0.50

-0.40

-0.30

-0.20

-0.10

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

-0.70

-0.60

-0.50

-0.40

-0.30

-0.20

-0.10

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

31

-De

c-1

5

29

-Fe

b-1

6

30

-Ap

r-1

6

30

-Ju

n-1

6

31

-Au

g-1

6

31

-Oct

-16

31

-De

c-1

6

10-Yr Japan Bond 10-Yr Swiss Bond 10-Yr German Bund

Negative Yielding Bond Value (in US$ trillion) & 10-Year Govt. Bond Yields (in %)

Global Aggregate Value of Negative Yielding Debt (includes –ve yielding bonds across all duration)

As per the Bloomberg Barclays Global Aggregate Negative Yielding Debt Index, which includes negative yielding bonds across all duration, the value of such bonds have fallen by $1.3 trillion in the second half of 2016

14.1

14.7

15.4

15.715.6

15.3

14.4*

Swiss 10Y is the only long dated Sov.

bond now offering negative yield

66

Fed Outlook on Rates – FOMC sees three rate hikes in 2017…

0.00

0.25

0.50

0.75

1.00

1.25

1.50

1.75

2.00

2.25

2.50

2.75

3.00

3.25

3.50

3.75

4.00

2016 2017 2018 2019 Longer Term

Imp

lied

Fe

d F

un

ds

Targ

et

Rat

e

Year End Projection

FOMC Dots Median at Dec. Meeting

FOMC Dots Median at Sept. Meeting

OIS - As of Dec. Meeting Date

Overnight Index Swap (OIS)As at 02-Jan-2017

Implied Fed Funds Target Rate based on FOMC member forecast

Source: Bloomberg; NBAD

Federal Open Market Committee’s (FOMC) decision toraise interest on December 14, 2016 was unanimous andthey now see three rate hikes in 2017 and Fed Funds ratereaching 1.375% by end of 2017.

77

… but markets are pricing only two possible hikes in 2017 – the first not until June

1.375

Rat

e s

ee

n b

y D

ec-

15

by Dec-15by Dec-15

by Dec-15

by Dec-16

by Dec-16

by Dec-16by Dec-16

1.120

0.00

0.25

0.50

0.75

1.00

1.25

1.50

1.75

2.00

2.25

2.50

2.75

3.00

3.25

3.50

3.75

4.00

4.25

0.00

0.25

0.50

0.75

1.00

1.25

1.50

1.75

2.00

2.25

2.50

2.75

3.00

3.25

3.50

3.75

4.00

4.25

De

c-1

4

Mar

-15

Jun

-15

Sep

-15

De

c-1

5

Mar

-16

Jun

-16

Sep

-16

De

c-1

6

FOMC median projection for end of 2016 FOMC med proj for end of 2017 30 Day Fed Funds Rate (market expectation) FOMC med proj for end of 2015

FOMC’s Fed Funds Rate Median Projection at Quarterly Meetings vs Market’s Expectation for Rate (rate in %)

0

10

20

30

40

50

0

20

40

60

80

100

May

-16

Jun

-16

Jul-

16

Au

g-1

6

Sep

-16

Oct

-16

No

v-1

6

Dec

-16

DB Global Risk Indicator CS Fear Barometer

Market Sentiment Indicators (past 6-months)The FOMC median projection at different policy meeting dates for last two years

shows that the FED has consistently fallen behind its projections and we have only seen two hikes in past two years. This time however the Fed sounded greater confidence in its projections, supported by some strong economic indicators.

The various sentiment/fear indicators also showing signals that near-term risk are high especially around the

implications from new economic policies announcedby US President elect Donald Trump.

Markets have also adjusted their expectations for higher rates but they see only two hikes in 2017 and more importantly they don’t

expect the first hike to come until June.

Note: The DB Global Risk Indicator is a Global Sentiment Indicator Index maintained by Deutsche Bank and higher values represent higher risk conditions; CS Fear Barometer in an index maintained by Credit Suisse and measures investor sentiment for 3-month investment horizons – the higher the level, the greater the fear is; Source: Bloomberg; NBAD

by Dec-17

88

The near-term macro environment bodes well for GCC debt issuance…


Credit spreads for GCC Sovereigns have tightened with higher oil prices and we may expect some further tightening next year as Opec’s new strategy isfocused to cut output and support oil price in near-term.

25

30

35

40

45

50

55

60

120

140

160

180

200

220

240

260

31

-De

c-1

5

31

-Jan

-16

29

-Fe

b-1

6

31

-Mar

-16

30

-Ap

r-1

6

31

-May

-16

30

-Ju

n-1

6

31

-Ju

l-1

6

31

-Au

g-1

6

30

-Se

p-1

6

31

-Oct

-16

30

-No

v-1

6

31

-De

c-1

6

GCC Credit Spreads in bps (BUAEUL Index LHS) Brent Price in US$ (RHS)

Low

367 433 302High

Close/Low

156 209 113

93 147 61

93 146 80

60

78

Low

Op

tio

n A

dj.

Sp

read

in b

ps

5-Y

ear

CD

S in

bp

s

Abu Dhabi

Qatar

Bahrain

Saudi Arabia

Opec decisionto cut output

Open

Open

Open

Open

Close/Low

Close

Close

High

High

High

Bre

nt

oil

pri

ce in

US$

/bar

rel

99

Bahrain

Oman

KSA

UAE

Qatar

Kuwait

GCC

0

10

20

30

40

50

60

70

80

90

100

30 40 50 60 70 80 90 100 110

Go

vt. r

even

ue

fro

m o

il se

cto

r (%

sh

are)

Budget break even oil price (US$)

High

Hig

h

High

Low

Low

Low

Low

Hig

h

Current oil price (Brent)

…as GCC nations still need to raise capital to fund their budget spend/deficit

Source: NBAD estimates; Bloomberg

Oil prices are still below the Budget Break Even (B/E) Price for most of the GCC nations. We thus believe that GCC nations will continue to tap the debtcapital markets to help fund their budgeted spending/deficit.

1010

17.5

9.0

5.0

4.5

2.6

0.9

0.5

Saudi Arabia

Qatar

Abu Dhabi

Oman

Bahrain

Dubai

Sharjah

0

5

10

15

20

25

30

35

40

45

50

55

60

65

70

75

2010 2011 2012 2013 2014 2015 2016

23.2 21.118.2 18.4 18.9

15.0

54.6

2.4 4.8 14.1 11.413.7

7.6

14.4

Conventional bond SukukTotal issuance comparison (in $bn)

112%jump

32.6bn

69.1bnBreakdown of 2016 issuance

For the above new issue analysis we have considered major hard currency ($/€/£/A$) bonds and sukuk issuances from the six nation GCC region. This includeboth fixed and floating rate issuances above $100m and maturity of 1-year or more.

GCC bonds & sukuk issuance


2016 was a blockbuster year for GCC fixed income primary market, dominated by sovereign issuances. We expect 2017 to be another year of recordissuance as we see that a strong new issue pipeline is already building; this time we expect more issuance from corporates and financial institutions relativeto their offerings last year. However, still see sovereign deals making up a large component of 2017 issuance as they need to tap the debt capital marketson an ongoing basis to diversify their sources of funding and to help plug their annual budget deficits.

Sov:$40b71%

Fin: $18b26%

Corp: $11b16%

GCC sovereign debt issuance

1111

Anchored demand seen for GCC Sovereign deals


Private Placements saw a significant uptick in 2016

Reverse enquiries were the main source of Private Placement deals; this would indicate that investor awareness of GCC credit is increasing, and moreimportantly they are willing to take exposure to GCC debt

Asian and US investors participation in GCC deals is increasing

GCC issuers are willing to execute deals even during Ramadan

Issuers are willing to experiment in terms of bond structures to attract a wider investor base – like hybrid bonds or the Formosa bonds as issued by NBAD thisyear to the Taiwanese investors

Some new trends that we saw emerging in 2016

0.0

2.0

4.0

6.0

8.0

10

.0

12

.0

14

.0

16

.0

18

.0

20

.0

22

.0

24

.0

26

.0

28

.0

30

.0

17.0

19.7

6.0

7.0

67bn

5.0

9.0

2.5

2.0

Amount issued

Orderbook

GCC sovereign deals and their order-book size

Times oversubscribed2.4x

2.2x

3.4x

3.8x

70

.0

65

.0Amount in billion US$

5Y: 5.5bn 10Y: 5.5bn 30Y: 6.5bn

The $17.5bn 3-tranche deal from Kingdom of Saudi Arabia was the biggest ever Sovereign deal from emerging markets so far;More than 40% demand for the 30-year bond said to have come from US investors

Abu Dhabi dual-tranche(5y & 10y deal in Apr)

Qatar multi-tranche(5, 10 & 30y deal in May)

Oman dual-tranche(5y & 10y deal in Jun)

Bahrain dual-tranche(7y Sukuk & 12y Bond deal in Oct)

Saudi Arabia multi-tranche(5, 10 & 30y deal in Oct)

17.5bn

3.5x

1212

QATAR 06/46

KSA 10/46

CHILE 10/42

MALAYS 04/46

MEX 01/47

PERU 11/50

COLOM 01/41

RUSSIA 09/43

INDON 01/46

KOREA 06/44

ROMANI 01/44

SOAF 10/46

KAZAKS 07/45

82

84

86

88

90

92

94

96

98

100

102

21

-Oct

-16

28

-Oct

-16

4-N

ov-

16

11

-No

v-1

6

18

-No

v-1

6

25

-No

v-1

6

2-D

ec-1

6

9-D

ec-1

6

16

-Dec

-16

23

-Dec

-16

30

-Dec

-16

Saudi Arabia 30-year bond performance relative to other EM peers on a rebased scale starting 21-Oct-16

ADGB 05/26

QATAR 06/26

KSA 10/26

CHILE 01/26

MALAYS 04/26

MEX 01/26

PERU 07/25

PERU 08/27

OMAN 06/26

RUSSIA 05/26

INDON 01/26

RAKS 03/25

KOREA 11/25

POLAND 04/26

ROMANI 01/24

SOAF 04/26

KAZAKS 07/25

90

92

94

96

98

100

102

21

-Oct

-16

28

-Oct

-16

4-N

ov-

16

11

-No

v-1

6

18

-No

v-1

6

25

-No

v-1

6

2-D

ec-1

6

9-D

ec-1

6

16

-Dec

-16

23

-Dec

-16

30

-Dec

-16

Saudi Arabia 10-year bond performance relative to other EM peers on a rebased scale starting 21-Oct-16

The KSA 30-year bond has a record run in a volatile Q4’2016 and outperformed its EM peers


We have showed the movement in bond price on a rebased scale starting 21-Oct-16 as the KSA bonds were issued on 20-Oct-16

1313

The Saudi sovereign deal also helped alleviating the liquidity squeeze in the economy

Source: Bloomberg; SAMA; NBAD

468

150

160

170

180

190

200

210

220

230

240

250

460

462

464

466

468

470

472

474

476

478

480

30

Dec

15

30

Jan

16

29

Feb

16

31

Mar

16

30

Ap

r16

31

May

16

30

Jun

16

31

Jul1

6

31

Au

g16

30

Sep

16

31

Oct

16

30

No

v16

31

Dec

16

KSA M3 Money Supply (LHS in US$ bn) KSA 3M Interbank Rate (in basis points; RHS)

KSA banking system liquidity improved significantly since Oct bond issue

The jump in M3 money supply in October & November indicates that a major portion of the $17.5bn sovereign bond proceeds have moved in to the banking system;

The Saudi 3-month interbank rate has fallen by some 30bps since the bonds were issued

$478bnUp

$10bn

Down35bps

We expect the Saudi Govt. to issue international and local debton a regular basis for next few years to help plug its budgetdeficit; The kingdom projects a deficit of $53bn for 2017.

In its 2017 budget statement, announced late December, theKingdom said its new debt issue will not exceed SAR 450bn($120bn) by 2020 as the debt management office has set theissuance ceiling at 30% of GDP. As per the statement, KSA’stotal government debt for 2016 was approximately SAR316.5bn ($84.4bn), which is 12.3% of the projected GDP infixed prices for 2016.

Following the budget announcement, Saudi Arabia’s financeminister also said that authorities have paid more than SAR100bn ($27bn) in arrears to private companies in the past twomonths.

Sovereigns:* KSA plans to borrow $10-15bn internationally in 2017mostly through bond market, including a sukuk;

* Kuwait targets to issue $10bn in Q1;

* Governments of Dubai, Ras Al Khaimah, Bahrain and Omanare also expected issue more bonds/sukuk.

Corporates:KSA’s ACWA Power, Kuwait’s National Industries & Dubai’sEmirates National Oil Co (ENOC) could issue US$ bonds.

Financials:Dubai Islamic Bank, Gulf International Bank, Warba Bank, AlAhli Bank and Bank of Sharjah are few names who have beenflagged to come up with bond/sukuk issue in near-term.

GCC new issue pipeline

1414

How did the broader GCC credits perform in 2016 relative to EM?

BUAEUL: UAE Composite US$ Bond Index; BUSC: Investment Grade Corporate US$ Bond Index BEMI: Emerging Markets Inv. Grade US$ Bond Index

GCC credits usually bring defensive benefits for investor portfolios in terms of (1) risk-reward & (2) geographic diversification;

For example, when we look at 2016 spread performance, on a relative basis, GCC credits have underperformed the broader emerging market. However, ifwe compare the same relative spread performance for last two months, when bonds sold-off heavily, we can see that GCC credits have outperformed.

GCC credits suffered the minimum capital erosion in the recent sell-off when compared to the broader emerging market credits (chart #2). Moreover GCCcredits are placed perfectly between Global Inv. Grade credits and EM credits (chart #1) to balance the risk-reward benefit for investors as they havehigher credit quality (mostly Inv. Grade); they also offer better credit spreads when compared to similarly rated credits from developed economies.


100

125

150

175

200

225

250

275

300

325

100

125

150

175

200

225

250

275

300

325

31

Dec

15

31

Jan

16

29

Feb

16

31

Mar

16

30

Ap

r16

31

May

16

30

Jun

16

31

Jul1

6

31

Au

g16

30

Sep

16

31

Oct

16

30

No

v16

31

Dec

16

BUAEUL Index BUSC Index BEMI Index

On option adjusted spread basis GCC credits underperformed

BUAEUL: tightened 24bpsBUSC: tightened 44bpsBEMI: tightened 70bps

# 1: OAS spread (bps)

95

96

97

98

99

100

101

95

96

97

98

99

100

101

8N

ov1

6

12

No

v16

16

No

v16

20

No

v16

24

No

v16

28

No

v16

2D

ec1

6

6D

ec1

6

10

Dec

16

14

Dec

16

18

Dec

16

22

Dec

16

26

Dec

16

30

Dec

16

BUAEUL Index BUSC Index BEMI Index

GCC credits are more defensive in volatile markets; The loss suffered by GCC credits in the recent bond sell-off (since the US

election results were out on Nov 8) is less pronounced

Thus we expect continued strong demand for GCC papers

#2 Change in index value from Nov.8 (rebased to 100)

1515

GCC credit quality at a glance

Note: The ratings mentioned here are composite credit rating for each issuer. Please see appendix for the methodology of calculating composite credit rating; * Dubai is not rated by any rating agency and we have assigned a proxy rating o ‘BBB’ based on its fundamentals with a relative comparison to Oman (BBB), Bahrain (BB) & DEWA (BBB); Source: Bloomberg; NBAD

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bai

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4

5

6

7

8

9

10

11

12

13

14

15

Co

mp

osi

te R

atin

g

AA+

AA

AA-

A+

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A-

BBB+

BBB

BBB-

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BB

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bad

ala

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TDIC

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2

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7

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9

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13

14

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AA

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BBB+

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NB

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CB

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b N

atio

nal

Ban

k

Du

bai

Isla

mic

Ban

k

No

or

Bo

ub

yan

ban

k

Gu

lf In

v C

orp

Bu

rgan

Ban

k

HSB

C B

ank

Om

an

Sau

di I

nv

Ban

k

Gu

lf In

tl B

ank

Co

m B

ank

of

Du

bai

Tam

wee

l

Mas

hre

q

Ban

k o

f Sh

arja

h

Shar

jah

Isla

mic

Ban

k

ahli

NB

F (F

uja

irah

)

Om

an A

rab

Ban

k

Ban

k M

usc

at

UA

B

Ah

li U

nit

ed B

ank

NB

O

Ban

k D

ho

far

Ban

k So

har

Ah

li B

ank

SAO

G

AB

C

NB

B

BB

K4

5

6

7

8

9

10

11

12

13

14

15

16

17

Co

mp

osi

te R

atin

g

AAA

AA+

AA

AA-

A+

A

A-

BBB+

BBB

BBB-

BB+

BB

GCC Sovereigns GCC Corporates

GCC Financials

BB-

BB-

1616

GCC sovereign credit ratings and CDS spreads versus peers

Bahrain

Turkey

Russia

Indonesia

India

Dubai*

Spain

Malaysia

Italy

Poland

Kingdom of Saudi ArabiaChina

Japan

South Korea

Abu Dhabi

Qatar

UK

France

Austria

BelgiumHong Kong

0

25

50

75

100

125

150

175

200

225

250

275

300

325

CD

S (b

ps)

AA+ AA AA- A+ A A-AAA BBB BBB-BBB+ BB+ BB

The chart shows that Gulf sovereigns are rated favourably as compared to many of their peers from the EMEA region.

Notes: * X-axis represents the composite rating (please refer Appendix for calculation method); Dubai is not rated by any rating agency and we have assigned a proxy rating of ‘BBB’ based on its fundamentals with arelative comparison to Oman (BBB), Bahrain (BB) & DEWA (BBB). The ratings have been arranged from higher to lower starting from ‘AA’, followed by ‘AA-’ and so on; CDS levels are for 30th Dec. 2016; Source: Bloomberg

Indeed Abu Dhabi and Qatar both have maintained their AA ratings from all major rating agencies, despite oil price being averaged around $45/barrel in 2016. The

ratings underpin the fact that the sovereigns have substantial reserves and a range of tools available to them to deal with the lower oil price environment.

1717

GCC spread performance summary – FY 2016Top 5 / bottom 5 bond/sukuk performers (z-spread, bps) in each category from 31st Dec 2015 to 30th Dec 2016

Notes: (1) We have used a list of GCC public debt which are maturing in 2018 or beyond and for which NBAD trading desk provides market price; (2) If the instrument is a "Sukuk", the ticker contains "(S)"; (3) Allbonds/sukuks are $ denominated unless any other currency is highlighted in the ticker. (3) All bonds/sukuks are senior unsecured debt of the issuer unless an abbreviation for the debt type is highlighted in the ticker –e.g. – “Unsec” = Unsecured debt junior to Senior Unsecured debt; ; “Sub” = Subordinated; “Sr Sub” = Senior Subordinated; “Jr Sub” = Junior Subordinated; “Perp” = Perpetual; Callable, Puttable and Sinkable is highlightedby using “Call”, “Puta”, & “Sink” respectively; (4) * highlights spread change from the 1st settlement date of the bond as it was issued in 2016; (5) ^ Instrument/issuer with borderline IG ratings (BBB-/Baa3) or below areconsidered as Sub-inv grade for comparison purpose; Source: NBAD; Bloomberg

-160-140-120-100-80-60-40-20020406080

+14

+9

+8

+6

+3

-90

-93

-106

-120

-151

Sovereigns

SHARSK 21 (S) *27/1/16

BHRAIN 24 (S) *12/10/16

BHRAIN 28 *12/10/16

BHRAIN 20

OMAN 21 *15/6/16

QATAR 40

QATAR 19

QATAR 22

ADGB 19

QATDIA 20

-200-160-120-80-4004080120

+8

+3

+0

-2

-8

-85

-87

-105

-119

-178

Financials – Abu Dhabi & Qatar

ADIBUH 49 (S) Jr Sub PERP

ABQKQD 21 *13/4/16

NBADUH 49 Jr Sub PERP

COMQAT 21 *13/6/16

ADCBUH 23 Sub CALL

QNBK 20

ALKHAL 18

ALHILA 49 (S) Jr Sub PERP

NBADUH 19

QNBK 21 *7/9/16

-200-160-120-80-4004080120

+9

-21

-25

-26

-29

-144

-152

-179

-185

-190

Financials – ex AD/Qatar

EBIUH 23 Sub CALL

EBIUH 49 Jr Sub PERP

BGBKKK 49 Jr Sub PERP

NBOBOM 49 Jr Sub PERP

EBIUH 49 Jr Sub PERP

SIB 20 (S)

DIBUH 20 (S)

SIB 18 (S)

HSBC 19

NBOBOM 19

-125-100-75-50-250255075

+6

+2

-6

-8

-12

-73

-73

-80

-100

-109

Inv. Grade Corporates – Abu Dhabi

TAQAUH 3.625 21 *22/6/16

TAQAUH 26 *22/6/16

TAQAUH 2.5 18

TAQAUH 19

TAQAUH 7.25 18

INTPET 22

INTPET 20

ETISLT 21 €

ETISLT 24

ETISLT 19

-270-225-180-135-90-4504590135

+19

+18

+13

+5

+0

-74

-76

-78

-83

-258

Inv. Grade Corporates – ex Abu Dhabi

MAFUAE 49 Jr Sub PERP

SECO 43 (S)

SECO 22 (S)

SECO 44 (S)

DPWDU 20

EMIRAT 23 (S) SINK

QTELQD 19

RASGAS 19 Sec

QTELQD 21

OMGRID 25

-300-250-200-150-100-50050100150

-23

-25

-28

-35

-36

-125

-133

-135

-174

-364

GCC Corporates – Sub investment grade^

DAMACR 19 (S)

DARALA 18 (S)

BATELC 20

DARALA 19 (S)

HIKLN 20

EMAAR 26 (S) *15/9/16

FLYDU 19 (S)

MUMTAK 21 (S)

EMAAR 19 (S)

DICUH 19 (S)

1818

Major primary deals from the GCC in FY 2016

Issue Entity of Credit RiskEntityType

DomainBond / Sukuk

Moody's/ S&P rating

Issuesize (mn)

TenorPricing Date

Priced (bps)

PricingZ-spread*

Zsp as at30-Dec-16

Change in Zsp

SHARSK 3.839 21 Emirate of Sharjah Sov Sharjah S A3 / A $500 5-yr 20/Jan MS+250 249 97 -151.4

ISDB 0.255 23 € Islamic Development Bank Fin Saudi Arabia S NR / AAA €300 7-yr 22/Feb 25.5(Y) 7 -18* -25.2

BHRAIN 5.875 21 TAP

Kingdom of Bahrain Sov Bahrain B NR / BB $275 5-yr 24/Feb T+447.5 458 288 -170.8

BHRAIN 7.0 26 TAP Kingdom of Bahrain Sov Bahrain B NR / BB $325 10-yr 24/Feb T+561.6 590 410 -180.0

ISDB 1.775 21 Islamic Development Bank Fin Saudi Arabia S Aaa / NR $1500 5-yr 3/Mar MS+50 43 42* -0.3

KWIPKK 5 23 Kuwait Projects Co Corp Kuwait B Baa3 / BBB- $500 7-yr 8/Mar 500(Y) 342 239 -103.7

DIBUH 3.6 21 Dubai Islamic Bank Fin Dubai S Baa1 / NR $500 5-yr 22/Mar MS+230 240 144 -95.9

DUGB 3.89 25Emirate of Dubai(Dept. Of

Finance)Sov Dubai S NR / NR $569 9-yr 23/Mar 389(Y) 222 171* -50.7

ABQKQD 3.625 21 Ahli Bank Fin Qatar B A2 / NR $500 5-yr 5/Apr MS+260 259 140 -119.5

ISCODV 2.468 21Islamic Corp for the

Development of the Private SectorFin Saudi Arabia S Aa3 / AA /*- $300 5-yr 6/Apr MS+130 130 71* -58.8

ADGB 2.125 21 Emirate of Abu Dhabi Sov Abu Dhabi B NR / AA $2500 5-yr 25/Apr T+85 99 63 -36.3

ADGB 3.125 26 Emirate of Abu Dhabi Sov Abu Dhabi B NR / AA $2500 10-yr 25/Apr T+125 150 100 -50.2

BKMBOM 3.75 21 Bank Muscat Fin Oman B Baa1 / BBB- $500 5-yr 25/Apr T+255.6 269 169 -99.2

MUBAUH 2.75 23 Mubadala Development Co. Corp Abu Dhabi B Aa2 / AA $500 7-yr 9/May MS+150 148 125 -23.9

BUBYAN 6.75 49 Jr Sub PERP

Boubyan Bank Fin Kuwait S NR / NR $250 Perpetual 10/May MS+558.8 555 378* -177.3

ERESQD 4.375 21 Ezdan Holding Group Corp Qatar S Ba1 / BBB- $500 5-yr 11/May 437.5(Y) 319 261* -57.7

EIBUH 3.542 21 Emirates Islamic Bank Fin Dubai S NR / NR $750 5-yr 23/May MS+220 221 145 -76.0

* Pricing Z-spread is back calculated using Bloomberg data analytics by taking into consideration the issue price/reoffer price and first settlement date of the security. Hence, the number is indicative only; * The z-spread at 30-Dec-16 is from Bloomberg as NBAD price is not available for the security; The priced column refers to the spread over benchmark where in “T” stands for Treasury, “MS” stands for Mid Swap, and “Y” stands for yield when T or MS spread in not available; Source: Bloomberg; NBAD

1919



DomainBond / Sukuk

Moody's/ S&P rating

Issuesize (mn)

TenorPricing Date

Priced (bps)

PricingZ-spread*

Zsp as at30-Dec-16

Change in Zsp

DPWDU 3.908 23 DP World Crescent Ltd Corp Dubai S Baa2 / NR $1200 7-yr 24/May MS+237.5 242 178 -64.3

EAPART 6.75 21 Unsec

Etihad Airways Partners II BV Corp Abu Dhabi B NR / NR $500 5-yr 24/May 675(Y) 543 459* -83.7

NOORBK 6.25 49Sub PERP

Noor Bank Fin Dubai S NR / NR $500 Perpetual 24/May 625(Y) 505 388* -117.2

QATAR 2.375 21 State of Qatar Sov Qatar B Aa2 / AA $3500 5-yr 25/May T+120 129 93 -36.0



COMQAT 3.25 21 Commercial Bank of Qatar Fin Qatar B A2 / BBB+ $750 5-yr 6/Jun MS+215 229 143 -86.7

OMAN 4.75 26 Sultanate of Oman Sov Oman B Baa1 / BBB- $2500 10-yr 8/Jun T+306.6 337 281 -56.5

OMAN 3.625 21 Sultanate of Oman Sov Oman B Baa1 / BBB- $1500 5-yr 8/Jun T+241.6 260 170 -89.9

TAQAUH 3.625 21Abu Dhabi National Energy

Co.Corp Abu Dhabi B A3 / A- $500 5-yr 14/Jun T+257 254 146 -108.5

TAQAUH 4.375 26Abu Dhabi National Energy

Co.Corp Abu Dhabi B A3 / A- $500 10-yr 14/Jun T+289.4 297 198 -99.8

QTELQD 3.75 26Ooredoo QSC (formerly

known as Qatar telecom)Corp Qatar B A2 / A- $500 10-yr 14/Jun MS+240 234 168 -66.4

MAFUAE 4.75 24 TAP

Majid Al Futtaim Corp Dubai B NR / BBB 300 8-yr 11/Jul 395 (Y) 266 202 -64.3

NBOBOM 3.125 19 TAP

National Bank of Oman Fin Oman B Baa2 / NR 100 3-yr 12/Jul MS+200 193 158 -35.7

EIBUH 3.542 21 TAP Emirates Islamic Bank Fin Dubai S NR / NR 250 5-yr 30/Aug MS+170 177 145 -31.7

QNBK 2.125 21 Qatar national Bank Fin Qatar B Aa3 / A+ $1000 5-yr 31/Aug T+117.3 122 131 +8.5

SIB 3.084 21 Sharjah Islamic Bank Fin Sharjah S A3 / NR $500 5-yr 1/Sep MS+185 190 130 -59.6


2020



DomainBond / Sukuk

Moody's/ S&P rating

Issuesize (mn)

TenorPricing Date

Priced (bps)

PricingZ-spread*

Zsp as at30-Dec-16

Change in Zsp

BGBKKK 3.125 21 Burgan Bank Fin Kuwait B A3 / NR $500 5-yr 7/Sep T+215.9 207 133 -73.9

EMAAR 3.635 26 Emaar Properties Corp Dubai S Baa3 / BBB- $750 10-yr 7/Sep MS+225 214 178 -35.6

OMAN 3.625 21 Tap

Sultanate of Oman Sov Oman B Baa1 / BBB- 500 5-yr 28/Sep T+230 224 170 -53.6

OMAN 4.75 26 Tap Sultanate of Oman Sov Oman B Baa1 / BBB- 1000 10-yr 28/Sep T+315 328 281 -47.4

UNBUH 2.75 21 Union national bank Fin Abu Dhabi B A1 / NR $600 5-yr 28/Sep MS+170 164 132 -32.2

BHRAIN 5.624 24 Kingdom of Bahrain Sov Bahrain S NR / BB- $1000 7-yr 4/Oct MS+424 419 299 -120.5

BHRAIN 7 28 Kingdom of Bahrain Sov Bahrain B NR / BB- $1000 12-yr 4/Oct MS+539 538 432 -106.0

Taqa 3.625 2021 Tap

Abu Dhabi National Energy Co.

Corp Abu Dhabi B A3 / A- 250 5-yr 13/Oct T+257 246 146 -100.5

Taqa 4.375 2026 Tap

Abu Dhabi National Energy Co.

Corp Abu Dhabi B A3 / A- 500 10-yr 13/Oct T+289.4 295 198 -97.5

AUBKWK 5.5 49 Jr Sub PERP

Ahli United Bank KSCP Fin Kuwait S NR / NR $200 Perpetual 18/Oct MS+422.6 424 329* -94.6

KSA 2.375 21 Kingdom of Saudi Arabia Sov Saudi Arabia B A1 / NR $5500 5-yr 19/Oct T+135 127 103 -23.5



EQPTRC 3 22 Equate Petrochemical Co Corp Kuwait B Baa2 / BBB+ $1000 5-yr 27/Oct MS+195 202 196* -6.0

EQPTRC 4.25 26 Equate Petrochemical Co Corp Kuwait B Baa2 / BBB+ $1250 10-yr 27/Oct MS+270 277 246* -30.2

UNITYL 3.86 21 Etihad Airways Corp Abu Dhabi S NR / NR $1500 5-yr 23/Nov MS+210 206 162* -43.4

ISDB 2.263 21 Islamic Development Bank Fin Saudi Arabia S Aaa / AAA $1250 5-yr 30/Nov MS+45 47 35* -12.4


2121

Major primary deals from the GCC in FY 2016 - performance in the secondary market since issue(change in z-spread and cash price since issue date till 30th December 2016)

-3.0 -2.0 -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0

-2.6

+0.1

+0.2

-0.9

-2.3

+2.3

+0.0

+1.1

+1.9

+0.7

+0.1

+4.2

-2.9

-1.3

-1.4

+1.3

-0.5

+1.9

-0.5

+1.1

+2.8

-2.2

+3.4

+7.0

+1.4

+3.8

Notes: (1) If the instrument is a "Sukuk", the ticker contains "(S)" next to the maturity year; (2) All bonds/sukuks are $ denominated unless any other currency is highlighted in the ticker. (3) All bonds/sukuks are seniorunsecured debt of the issuer unless an abbreviation for the debt type is highlighted in the ticker – e.g – “Unsec” = Unsecured debt; “Sub” = Subordinated; “Sr Sub” = Senior Subordinated; “Jr Sub” = Junior Subordinated;“Perp” = Perpetual; We have also highlighted the Callable, Puttable and Sinkable nature of the bond, if it is, by using “Call”, “Puta”, & “Sink” respectively; Source: NBAD; Bloomberg

Z-spread change (in bps) Cash price change

-195 -180 -165 -150 -135 -120 -105 -90 -75 -60 -45 -30 -15 0

-56

-90

-87

-36

-39

-70

-64

-84

-117

-76

-58

-177

-24

-36

-50

-99

-59

-119

-51

-96

-104

-0.3

-171

-180

-25

-151

Bond/Sukuk (Pricing date in dd/mm)

SHARSK 3.839 21 (S) (20/01)

ISDB 0.255 23 € (S) (22/02)

BHRAIN 7.0 26 TAP(24/02)

BHRAIN 5.875 21 TAP(24/02)

KWIPKK 5 23 (8/03)

DIBUH 3.6 21 (S) (22/03)

ABQKQD 3.625 21 (5/04)

DUGB 3.89 25 (S) (23/03)

ISCODV 2.468 21 (S) (6/04)

ADGB 3.125 26 (25/04)

BKMBOM 3.75 21 (25/04)

ERESQD 4.375 21 (S) (11/05)

ADGB 2.125 21 (25/04)

MUBAUH 2.75 23 (9/05)

BUBYAN 6.75 49 (S) Jr Sub PERP (10/05)

NOORBK 6.25 49 (S) Sub PERP (24/05)

EIBUH 3.542 21 (S) (23/05)

ISDB 1.775 21 (S) (3/03)

EAPART 6.75 21 Unsec(24/05)

DPWDU 3.908 23 (S) (24/05)

QATAR 2.375 21 (25/05)

QATAR 4.625 46 (25/05)

QATAR 3.25 26 (25/05)

OMAN 3.625 21 (8/06)

COMQAT 3.25 21 (6/06)

OMAN 4.75 26 (8/06)

2222

Major primary deals from the GCC in FY 2016 - performance in the secondary market since issue(change in z-spread and cash price since issue date till 30th December 2016)

-4.0 -3.0 -2.0 -1.0 0.0 1.0 2.0 3.0

-0.2

+1.3

-2.8

-2.7

-1.9

-3.5

-1.7

+1.1

+1.6

+1.3

+2.5

+2.8

-0.9

-3.1

-1.9

+0.0

-3.9

-0.8

-3.8

-2.2

-0.9

-2.0

+1.3

+1.6

-1.0

Notes: (1) If the instrument is a "Sukuk", the ticker contains "(S)" next to the maturity year; (2) All bonds/sukuks are $ denominated unless any other currency is highlighted in the ticker. (3) All bonds/sukuks are seniorunsecured debt of the issuer unless an abbreviation for the debt type is highlighted in the ticker – e.g – “Unsec” = Unsecured debt; “Sub” = Subordinated; “Sr Sub” = Senior Subordinated; “Jr Sub” = Junior Subordinated;“Perp” = Perpetual; We have also highlighted the Callable, Puttable and Sinkable nature of the bond, if it is, by using “Call”, “Puta”, & “Sink” respectively; Source: NBAD; Bloomberg

Z-spread change (in bps) Cash price change

-130 -120 -110 -100 -90 -80 -70 -60 -50 -40 -30 -20 -10 0 10

-12

-43

-30

-6

-51

-25

-24

-95

-97

-100

-106

-120

-54

-47

-32

-74

-36

-60

+8

-32

-36

-64

-109

-100

-66

Bond/Sukuk (Pricing date in dd/mm)

BHRAIN 5.624 24 (S) (4/10)

BHRAIN 7 28 (4/10)

Taqa 3.625% 2021 Tap (13/10)

Taqa 4.375% 2026 Tap (13/10)

KSA 2.375 21 (19/10)

QTELQD 3.75 26 (14/06)

TAQAUH 4.375 26 (14/06)

TAQAUH 3.625 21 (14/06)

NBOBOM 3.125 19 TAP (12/07)

MAFUAE 4.75 24 TAP (11/07)

EMAAR 3.635 26 (S) (7/09)

EIBUH 3.542 21 TAP (30/08)

QNBK 2.125 21 (31/08)

SIB 3.084 21 (S) (1/09)

UNBUH 2.75 21 (28/09)

BGBKKK 3.125 21 (7/09)

AUBKWK 5.5 49 (S) Jr Sub PERP (18/10)

OMAN 4.75 26 Tap (28/09)

OMAN 3.625 21 Tap (28/09)

KSA 4.5 46 (19/10)

EQPTRC 3 22 (27/10)

EQPTRC 4.25 26 (27/10)

UNITYL 3.86 21 (S) (23/11)

ISDB 2.263 21 (S) (30/11)

KSA 3.25 26 (19/10)

2323

Sovereigns spread performance – Abu Dhabi

Notes: * Highlights spread change from the 1st settlement date of the bond as it was issued in 2016; Source: NBAD; Bloomberg

AD

GB

19

AD

WA

20

SIN

K

AD

GB

21

*3/5

/16 AD

GB

26

*3/5

/16

+9

-44

-36

-50

0

10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

z-sp

read

(b

ps)

MaturityLongterm

Shortterm

30-Dec-1631-Dec-15 Curve on 31-Dec-15 Curve on 30-Dec-16

2424

Sovereigns spread performance – Qatar

QA

TA

R 1

8 (

S)

QA

TA

R 1

9

QA

TA

R 2

0

QA

TD

IA 2

0

QA

TA

R 2

2

QA

TA

R 2

3 (

S)

QA

TA

R 3

0

QA

TA

R 4

0

QA

TA

R 4

2

QA

TA

R 2

1 *

2/6

/16

QA

TA

R 2

6 *

2/6

/16

QA

TA

R 4

6 *

2/6

/16

-26

+6

-6

+14+8

+3

-2

+3 +2

-36

-39

-70

0

20

40

60

80

100

120

140

160

180

200

220

240

260

280

z-sp

read

(b

ps)

Maturity

30-Dec-1631-Dec-15

Longterm

Shortterm

Notes: (1) All bonds/sukuks are $ denominated; (2) If the instrument is a "Sukuk", the ticker contains "(S)" next to the maturity year; (3) ** Included QATDIA in Qatar Sov curve as it is explicitly Govt guaranteed; (4) * highlights spread change from the 1st settlement date of the bond as it was issued in 2016; Source: NBAD; Bloomberg

Curve on 31-Dec-15 Curve on 30-Dec-16

2525

Sovereigns spread performance – Saudi Arabia (KSA)

Notes: * Highlights spread change from the 1st settlement date of the bond as it was issued in 2016; Source: NBAD; Bloomberg

KS

A 2

1 *

26/1

0/1

6

KS

A 2

6 *

26/1

0/1

6

KS

A 4

6 *

26/1

0/1

6

-22

-26

-52

80

100

120

140

160

180

200

220

240

260

280

z-sp

read

(b

ps)

MaturityLongterm

Shortterm


2626

Sovereigns spread performance – Dubai, Bahrain, RAK, Sharjah & Oman

DU

GB

20 D

UG

B 2

1 P

UT

A

DU

GB

22 (

S)

DU

GB

23 (

S)

DU

GB

29 (

S)

DU

GB

43

BH

RA

IN 1

8 (

S)

Unsec BH

RA

IN 2

0

BH

RA

IN 2

1

BH

RA

IN 2

2

BH

RA

IN 2

3

BH

RA

IN 2

4 (

S)

*1

2/1

0/1

6

BH

RA

IN 2

6

BH

RA

IN 2

8

*12/1

0/1

6

BH

RA

IN 4

4

RA

KS

18 (

S)

RA

KS

25 (

S)

SH

AR

SK

21 (

S)

*2

7/1

/16

SH

AR

SK

24 (

S)

OM

AN

21 *

15/6

/16

OM

AN

26 *

15/6

/16

-16

-39-31

-55

-44

-50

-50

-93

-56

-64 -61

-120

-54-106

-38

-24

-25

-151

-43

-90

-56

0

50

100

150

200

250

300

350

400

450

500

550

z-sp

read

(b

ps)

MaturityLongterm

Shortterm

Notes: (1) If the instrument is a "Sukuk", the ticker contains "(S)"; (2) All bonds/sukuks are $ denominated unless any other currency is highlighted in the ticker. (3) All bonds/sukuks are senior unsecured debt of the issuer unless an abbreviation for the debt type is highlighted in the ticker – e.g – “Unsec” = Unsecured debt; “Sub” = Subordinated; “Sr Sub” = Senior Subordinated; “Jr Sub” = Junior Subordinated; “Perp” = Perpetual; We have also highlighted the Callable, Puttable and Sinkable nature of the bond, if it is, by using “Call”, “Puta”, & “Sink” respectively; (4) * highlights spread change from the 1st settlement date of the bond as it was issued in 2016; Source: NBAD; Bloomberg

30-Dec-1631-Dec-15 DUGB BAHRAIN Curve on 31-Dec-15 Curve on 30-Dec-16RAK SHARJAH Oman

2727

UAE financials spread performance


EIB

UH

18 (

S)

AD

CB

UH

18

SIB

18 (

S)

CB

DU

H 1

8

ALH

ILA

18 (

S)

FG

BU

H 1

9

AD

CB

UH

3 1

9

RA

KB

NK

19

NB

AD

UH

19

AD

CB

UH

2.7

5 1

9

HS

BC

19

EB

IUH

19

NB

AD

UH

20

AD

CB

UH

3 1

9

AD

CB

UH

20

SIB

20 (

S)

AD

CB

UH

2.7

5 1

9

EB

IUH

20

DIB

UH

20 (

S)

BO

SU

H 2

0

CB

DU

H 2

0

DIB

UH

21 (

S)

*3

0/3

/16

EIB

UH

21 (

S)

*3

1/5

/16

SIB

21 (

S)

*8

/9/1

6

UN

BU

H 2

1

*5/1

0/1

6

EB

IUH

22 €

-110 -82

-25

-98-47

-33

-37

-50

+3

-34

-21

-40

-11

-37-25

-29

-34 -37

-26

-112

-58

-96 -76

-60 -27

-61

30

50

70

90

110

130

150

170

190

210

230

250

270

290

310

z-sp

read

(b

ps)

Maturity Longterm

Shortterm

30-Dec-1631-Dec-15

2828

GCC financials spread performance (ex UAE)


QN

BK

18

BK

MB

OM

18

ALK

HA

L 1

8

QN

BK

18

CO

MQ

AT

19

NB

OB

OM

19

CO

MQ

AT

19 S

ub

BB

K 2

0

QN

BK

2.1

25 1

8

QIB

KQ

D 2

0 (

S)

INT

BO

Q 2

0

AB

QK

QD

21 *

13/4

/16

BK

MB

OM

21 *

3/5

/16

CO

MQ

AT

21 *1

3/6

/16

QN

BK

21

*7/9

/16

BG

BK

KK

21 *1

4/9

/16

-45

-50

-2

-45

-15

+9

-64

-33

-8 -39

-57

-119

-99

-87

+8

-74

30

50

70

90

110

130

150

170

190

210

230

250

270

290

310

330

z-sp

read

(b

ps)

Maturity Longterm

Shortterm

30-Dec-1631-Dec-15

2929

GCC financials spread performance (Subordinated bonds)


EB

IUH

23 S

ub C

ALL M

ar-

18

AD

CB

UH

23 S

ub C

ALL M

ay-1

8

AD

IBU

H 4

9 (

S)

Jr

Sub P

ER

P C

: O

ct-

18

DIB

UH

49 (

S)

Jr

Sub P

ER

P C

: M

ar-

19

EB

IUH

49 J

r S

ub P

ER

P C

: M

ay-1

9

ALH

ILA

49 (

S)

Jr

Sub P

ER

P C

: Jun

-19

BG

BK

KK

49 J

r S

ub P

ER

P C

: S

ep

-19

CO

MQ

AT

19 S

ub

AU

BB

I 49 J

r S

ub P

ER

P C

: A

pr-

20

BK

DB

OM

49 J

r S

ub P

ER

P C

: M

ay-2

0

NB

AD

UH

49 J

r S

ub P

ER

P C

: Jun

-20

EB

IUH

49 J

r S

ub P

ER

P C

: S

ep

-20

NB

OB

OM

49 J

r S

ub P

ER

P C

: N

ov-2

0

DIB

UH

49 (

S)

Jr

Sub P

ER

P C

: Jan

-21

NT

BK

KK

49 J

r S

ub P

ER

P C

: A

pr-

21

AD

CB

UH

23 S

ub

-190-85

-178

-132

-185Unch

-179

-64

-30 -87

-105

-144

-152

-96

-110

-53

75

125

175

225

275

325

375

425

475

525

575

625

675

725

775

z-sp

read

(b

ps)

Maturity date / First Call Date if Callbale or Perpetuals Longterm

Shortterm

30-Dec-1631-Dec-15

3030

Abu Dhabi corporates spread performance (Inv. grade – ex Ipic & Taqa)


MU

BA

UH

19

ETIS

LT 1

9

MU

BA

UH

21

ETIS

LT 2

1 €

DO

LNR

G 2

1 S

ec

MU

BA

UH

22

MU

BA

UH

23

*1

2/5

/16

ETIS

LT 2

4

ETIS

LT 2

6 €

-33

+6

-18

-6

-48

-16

-24+2

-13

25

35

45

55

65

75

85

95

105

115

125

135

145

155

165

175

z-sp

read

(b

ps)

Maturity Longterm

Shortterm

30-Dec-1631-Dec-15

3131

Abu Dhabi corporates spread performance (Inv. grade – Ipic curve)


INTP

ET 1

8 €

INTP

ET 2

0

INTP

ET 2

1 €

INTP

ET 2

2

INTP

ET 2

3 €

INTP

ET 2

6 £

INTP

ET 4

1

-54

-8

-25

-12

-42

-56

-42

0

20

40

60

80

100

120

140

160

180

200

220

240

z-sp

read

(b

ps)

MaturityLongterm

Shortterm


3232

Abu Dhabi corporates spread performance (Inv. grade – Taqa curve)

TAQ

AU

H 2

.5 1

8

TAQ

AU

H 7

.25

18

TAQ

AU

H 1

9

TAQ

AU

H 3

.62

5 2

1

*22

/6/1

6

TAQ

AU

H 5

.87

5 2

1

TAQ

AU

H 2

3

TAQ

AU

H 2

4

TAQ

AU

H 2

6

*22

/6/1

6

RP

CU

H 3

6 S

ec S

INK

TAQ

AU

H 3

6

-80 -73

-73

-109-55

-66

-59

-100

-61

-37

25

50

75

100

125

150

175

200

225

250

275

300

z-sp

read

(b

ps)

Maturity

Notes: (1) If the instrument is a "Sukuk", the ticker contains "(S)"; (2) All bonds/sukuks are $ denominated unless any other currency is highlighted in the ticker. (3) All bonds/sukuks are senior unsecured debt of the issuer unless an abbreviation for the debt type is highlighted in the ticker – e.g – “Unsec” = Unsecured debt; “Sub” = Subordinated; “Sr Sub” = Senior Subordinated; “Jr Sub” = Junior Subordinated; “Perp” = Perpetual; We have also highlighted the Callable, Puttable and Sinkable nature of the bond, if it is, by using “Call”, “Puta”, & “Sink” respectively; (4) * highlights spread change from the 1st settlement date of the bond as it was issued in 2016; (5) RPCUH 36 is issued by Ruwais Power Co which is 60% owned by Taqa; Source: NBAD; Bloomberg

Longterm

Shortterm


3333

Qatar corporates spread performance (Inv. grade)

RA

SGA

S 1

9 S

ec

QTE

LQD

18

(S)

QTE

LQD

19

QTE

LQD

21

QTE

LQD

23

QTE

LQD

25

QTE

LQD

26

*2

2/6

/16

QTE

LQD

28

QTE

LQD

43

+13-37

+5

+18

-15

-3

-66

-21

-10

50

75

100

125

150

175

200

225

250

z-sp

read

(b

ps)

Maturity

Notes: (1) If the instrument is a "Sukuk", the ticker contains "(S)"; (2) All bonds/sukuks are $ denominated unless any other currency is highlighted in the ticker. (3) All bonds/sukuks are senior unsecured debt of the issuer unless an abbreviation for the debt type is highlighted in the ticker – e.g – “Unsec” = Unsecured debt Sub” = Subordinated; “Sr Sub” = Senior Subordinated; “Jr Sub” = Junior Subordinated; “Perp” = Perpetual; We have also highlighted the Callable, Puttable and Sinkable nature of the bond, if it is, by using “Call”, “Puta”, & “Sink” respectively; (4) * highlights spread change from the 1st settlement date of the bond as it was issued in 2016; Source: NBAD; Bloomberg

Longterm

Shortterm

30-Dec-1631-Dec-15 RASGASQTEL Curve on 31-Dec-15 Curve on 30-Dec-16

3434

GCC Corporates spread performance (Inv. grade – ex Abu Dhabi & Qatar)


DEW

AA

E 1

8 (

S)

SAB

IC 1

8

MA

FUA

E 4

9 S

ub

PER

P; C

ALL

: Oct

-18

MA

FUA

E 1

9

DP

WD

U 2

0

INV

CO

R 2

0 (

S)

DEW

AA

E 2

0

SAB

IC 2

0 € SE

CO

22

(S)

EMIR

AT

23

(S)

SIN

K

SEC

O 2

3 (

S)

DP

WD

U 2

3 (

S)

*31

/5/1

6

SEC

O 2

4 (

S)

MA

FUA

E 2

4

INV

CO

R 2

4

EMIR

AT

25

SIN

K

KH

DR

WY

25

(S)

SIN

K

OM

GR

ID 2

5

MA

FUA

E 2

5 (

S)

DP

WD

U 3

7

SEC

O 4

3 (

S)

SEC

O 4

4 (

S)

-44

-44

-258

-52-74

-6

-37

-53-78

Unch

-61

-64

-65

-35-44

-50

-38

+19

-36

-74

-83

-76

0

25

50

75

100

125

150

175

200

225

250

275

300

325

350

375

400

425

450

475

500

525

z-sp

read

(b

ps)

Maturity Longterm

Shortterm

30-Dec-1631-Dec-15

3535

GCC Corporates spread performance (Sub investment grade^)

Notes: (1) If the instrument is a "Sukuk", the ticker contains "(S)"; (2) All bonds/sukuks are $ denominated unless any other currency is highlighted in the ticker. (3) All bonds/sukuks are senior unsecured debt of the issuer unless an abbreviation for the debt type is highlighted in the ticker – e.g. – “Unsec” = Unsecured debt; “Sub” = Subordinated; “Sr Sub” = Senior Subordinated; “Jr Sub” = Junior Subordinated; “Perp” = Perpetual; We have also highlighted the Callable, Puttable and Sinkable nature of the bond, if it is, by using “Call”, “Puta”, & “Sink” respectively; (4) ^ Instrument/issuer with borderline IG ratings (BBB-/Baa3) or below are considered as Sub-inv grade for comparison purpose; (5) * highlights spread change from the 1st settlement date of the bond as it was issued in 2016; Source: NBAD; Bloomberg

DA

RA

LA 1

8 (

S)

GM

SED

U 4

9 (

S) J

r Su

b P

ERP

; CA

LL: N

ov-

18

ALD

AR

18

(S)

KW

IPK

K 1

9

DIC

UH

19

(S)

DA

MA

CR

19

(S)

DA

RA

LA 1

9 (

S)

JAFZ

SK 1

9 (

S)

EMA

AR

19

(S)

FLYD

U 1

9 (

S)

HIK

LN 2

0 BA

TELC

20

KW

IPK

K 2

0

MU

MTA

K 2

1 (

S)

KW

IPK

K 2

3

*15

/3/1

6

EMA

AR

M 2

4 (

S)

DIF

CA

E 2

4 (

S)

EMA

AR

26

(S)

*1

5/9

/16

-174-53

-59

-87

-28

-364

-133

-52-23

-35

-125

-135

-69

-25

-104

-36

-57-36

25

75

125

175

225

275

325

375

425

475

525

575

625

675

725

775

825

z-sp

read

(b

ps)

Maturity Longterm

Shortterm

30-Dec-1631-Dec-15

3636

As mentioned in slide # 7 & 8, we have used “composite ratings” for the credit quality analysis – i.e. the average of the ratings assigned by three leading rating agencies Moody’s, S&P and Fitch – in order to provide a more representative view of the credit strength of each bank.

The composite rating is calculated as follows:

A score is assigned to the rating from each rating agency: AAA or equivalent being the best with a score of “1”, followed by AA+ or equivalent as “2”, AA or equivalent as “3”, AA- or equivalent as “4” and so on;

For example NBAD is rated Aa3/AA-/AA- by Moody’s/S&P/Fitch. So the scores are 4/4/4;

Hence the average of the scores is “4” which indicates a composite rating of “AA-” for NBAD;

In case the average score is not an absolute number – e.g. 4.33 (average of 4, 5, & 4 ) – the final score is derived by rounding off the average score to the nearest whole number. In this case “4”.

Appendix

3737

Rakesh Sahu / Chavan BhogaitaMarket Insights & StrategyGlobal MarketsNational Bank of Abu DhabiTel: +971 2 6110 [email protected]

Contact

gcc fixed income chart book: fy 2016 review

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