Commercial Bank of Dubai Raises AT1 Capital With Dentons

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Commercial Bank of Dubai has successfully closed an Additional Tier 1 capital issuance, with global law firm Dentons acting as legal adviser on the transaction. The deal strengthens the bank’s capital base and signals continued appetite among UAE lenders to tap international debt markets for regulatory capital instruments.

What is Additional Tier 1 capital and why do banks issue it?

Additional Tier 1, or AT1, instruments sit at the riskier end of the capital structure. They are perpetual, meaning they have no fixed maturity date, and they can absorb losses before senior creditors are touched. Regulators count them toward a bank’s core capital buffers under Basel III rules.

For banks, AT1 issuances are a cost-efficient way to bolster capital ratios without diluting existing shareholders through a fresh equity raise. For investors, the instruments offer higher yields than conventional bonds in exchange for accepting greater risk.

What role did Dentons play in the Commercial Bank of Dubai deal?

Dentons, one of the largest law firms by headcount operating across the Middle East, advised Commercial Bank of Dubai on the full issuance process. Legal counsel on AT1 transactions covers documentation, regulatory compliance and coordination with arranging banks and trustees.

The firm has an established UAE capital markets practice and has previously advised regional financial institutions on similar Basel III-compliant instruments.

Why it matters for the Gulf

UAE banks have been among the most active issuers of AT1 and Tier 2 capital instruments in the wider Middle East region. Robust loan growth, driven by a strong domestic economy and rising government infrastructure spending, increases pressure on lenders to maintain adequate capital ratios as their balance sheets expand.

A successful issuance by Commercial Bank of Dubai reinforces investor confidence in UAE bank credit at a time when global fixed-income markets remain sensitive to interest rate movements. It also reflects the broader maturation of Dubai as a hub for structured debt transactions.

AT1 issuance: key facts at a glance

• Issuer: Commercial Bank of Dubai
• Instrument type: Additional Tier 1 (AT1) capital
• Legal adviser: Dentons
• Regulatory framework: Basel III capital adequacy rules
• Purpose: Strengthening the bank’s regulatory capital base
• Market significance: Continues a run of UAE bank AT1 activity in regional debt markets

Commercial Bank of Dubai’s broader position in UAE banking

Commercial Bank of Dubai is a mid-sized UAE lender with a retail and corporate banking franchise spanning the Emirates. The bank has grown its loan book steadily alongside the broader economic expansion in Dubai, backed by tourism recovery, real estate activity and trade finance flows through Jebel Ali.

Maintaining strong capital ratios is a priority for the Central Bank of the UAE, which has aligned domestic requirements with international Basel standards. AT1 issuances give banks like Commercial Bank of Dubai flexibility to meet those requirements without reducing lending capacity.

What this signals for UAE capital markets in 2025

Dealmaking in the Gulf debt capital markets space has picked up pace, with regional banks and sovereigns using the window of stable oil revenues and strong credit ratings to lock in funding. AT1 instruments have found a receptive investor base globally, particularly among fund managers seeking higher-yielding paper in a still-elevated rate environment.

The involvement of a firm like Dentons, with offices across the UAE and the wider GCC, points to the growing sophistication and deal volume flowing through Dubai’s financial markets. More UAE banks are expected to revisit their capital structures before the end of the year as loan growth forecasts remain positive.

For more details on the transaction, see the original report from Dentons.

Disclaimer: This article covers a financial transaction and is intended for informational purposes only. It does not constitute investment advice. Consult a qualified financial adviser before making investment decisions.

As UAE banks continue to tap capital markets for AT1 and Tier 2 instruments, do you think Dubai is cementing its place as the region’s premier debt capital markets hub? Share your thoughts in the comments below.