National Bank of Abu Dhabi launches Dhs2bn settled floating rate subordinated convertible notes

The Notes are being marketed to investors with a floating rate coupon, such rate and the conversion premium to be determined following a bookbuilding exercise. All payments under the Notes will be made at the applicable U.S. dollar equivalent amount to the Dhs amount then due (to be determined in accordance with the Conditions of the Notes). The payment obligations of NBAD in respect of the Notes are conditional and will be subordinated to all of its unsubordinated payment obligations in the manner to be described in the Conditions of the Notes.

The Notes will only be convertible into the ordinary shares (the "Shares") of NBAD during the first five years after issue (excluding the first 3 months post Issue Date). Under UAE law, restrictions on foreign ownership of entities incorporated in the UAE ("Foreign Ownership Restrictions") limit the number of Shares that may be bought or held by or on behalf of persons that are neither UAE nationals nor entities that are majority owned by UAE nationals. Full details relating to the Foreign Ownership Restrictions will be set out in the prospectus to be published in relation to the Notes.

Unless previously purchased and cancelled, redeemed or converted, the Notes are expected to mature on 28 February 2018. The proceeds of the Notes will be used by NBAD for general corporate purposes. The issue price of the Notes is set at 100% of the aggregate principal amount of the Notes and the Conditions will provide that the Notes will be redeemed in cash at par on 28 February 2018 if Noteholders have not exercised their conversion right prior to the date falling 10 trading days prior to the fifth anniversary or up to the close of business on the 10th trading day before an early redemption at the option of NBAD.

NBAD will have the option, subject to the prior approval of the UAE Central Bank (if then required), to redeem in whole (but not in part) the Notes at par on or at any time after 28 February 2013 and by giving not less than 28 nor more than 32 business days' notice to the Noteholders.

Marketing of the transaction will commence on 10 February 2008 and the bookbuilding is expected to close at the end of the day on 11 February 2008, subject to the right of the Joint Bookrunners to close the bookbuilding earlier.

The Notes will be offered to institutional investors in certain jurisdictions outside the United States (including US Persons), Canada, Australia, Italy or Japan. The Notes will be offered to investors outside the United States in reliance on Regulations S under the U.S. Securities Act of 1933, as amended, and in compliance with the laws and regulations applicable in every country where the offering takes place.

Application has been made to list the Notes on the Professional Securities Market of the London Stock Exchange plc. The Shares are listed and traded on the Abu Dhabi Securities Market.

Subject to certain exceptions, NBAD has agreed to a 90-day lock up period with respect to any issuance, offer or sale of equity-linked securities, Shares and options or the announcement to do any of the foregoing.

Credit Suisse and Morgan Stanley are acting as Joint Bookrunners and National Bank of Abu Dhabi as Co Bookrunner of the Issue. Credit Suisse and National Bank of Abu Dhabi are acting as Joint Structuring Agents of the Issue.