In light of a rapidly evolving capital markets landscape, Bank Audi has established its own Capital Markets department in 1996 to help clients invest amidst Lebanon’s economic growth, and cater to the Bank’s proprietary investments.
In recent years, the department has expanded outside Lebanon in line with the Bank’s regional expansion plan, and now covers most securities traded in the larger Middle East and North Africa (MENA) region. Bank Audi’s success as an active participant and regular issuer of securities has helped develop and promote Lebanon's Capital Market, giving the Bank a strong placement power both locally and internationally.
Primary Market Activities
Bank Audi as Issuer
Bank Audi was the first Lebanese bank to launch an Initial Public Offering (IPO), and the first Middle Eastern issuer of Global Depositary Receipts (GDRs): 2 GDR issues have raised USD 115 million in November 1995 and in October 1997. The Bank was also the first Middle Eastern issuer of a Euro Medium Term Note (EMTN). As such, a USD 100 million 5-year Eurobond was issued in October 1996, has matured and been fully redeemed since. In May 2002, Bank Audi successfully raised USD 100 million of Tier 1 Capital in the form of Preferred Shares, marking the first similar issuance in Lebanon and the second in the Middle East. So far, the Bank has raised an excess of USD 825 million of Tier 1 Capital in the form of Preferred Shares and Common Shares.
Bank Audi as Arranger
Bank Audi has also acted as the co-lead manager of several Sovereign Eurobonds issued by the Republic of Lebanon, aggregating to USD 2 billion. The Bank was also the co-lead manager of several high-profile equity deals in the MENA region. As such, Bank Audi was granted the “Deal of the Year” award twice by The Banker magazine; in 2005, for its role in the USD 750 million Investcom LLC IPO, and in 2008 for its role in the USD 875 million Republic of Lebanon March 2013 Eurobond.
In addition, Bank Audi has arranged, managed and placed USD 1,180 million of Structured Notes linked to Lebanese Treasury Bills, as well as other types of financial products above USD 200 million.
Secondary Market Activities
Despite occasionally difficult and illiquid market conditions, Bank Audi has always been an active participant and market maker in the Fixed Income market. Today, the Bank deals in all securities issued outside Lebanon, in addition to all fixed-income instruments issued outside the MENA region. The combined turnover for the trading of fixed-income instruments on the secondary market is in excess of USD 1 billion per month.
Bank Audi also maintains 2 seats on the Beirut Stock Exchange, where it has ranked first over the past 3 years, averaging 30% of the trading activity. Furthermore, the Bank provides market making activities on over-the-counter traded equity securities.
Investing in Capital Markets: A Joint Responsibility
What is the Capital Markets Authority?
The Capital Markets Authority (“CMA”) is a national regulatory and supervisory authority established under Law 161 of August 17, 2011. The CMA’s role is to ensure the protection of savings invested in Financial Instruments in Lebanon, and to create an investment environment which guarantees investors’ trust, by developing investors’ knowledge of financial markets and putting in place regulations to implement its supervisory role.
Where does Bank Audi stand?
In line with Bank Audi’s longstanding commitment to align with local and international laws and regulations and given its leading role in establishing direct communication with clients while striving to meet their banking expectations and needs, Bank Audi seeks, for example, to:
Identify to the investors the features of each prospective investment in capital markets as well as its expected returns and risks, while clearly distinguishing between facts, analytical opinions and forecasts.
Ensure the protection of investors from illegal practices, while upholding principles and standards of professional integrity and transparency.
Prevent the disclosure and wrongful use of privileged information or the circulation of false or misleading information regarding any Financial Instrument, or its issuer.
Respect the preset frameworks and organize professional training activities for employees who perform operations on Financial Instruments, while monitoring their compliance with rules of professional conduct.
Promote Financial Instruments which are suitable for its clients.
Respect clients’ will and seek to achieve their objectives in the best professional manner.
How to determine suitability?
Bank Audi adopts a transparent approach when dealing with clients by clearly presenting Financial Instruments, highlighting their investment risks and providing the clients with any other information needed to let them have the necessary clarity and precision.
In light of the above, each client wishing to invest in Financial Instruments should fill out a detailed questionnaire enabling Bank Audi to determine client classification in order to assess the suitability of any Financial Instruments and/or services to the client’s profile, by highlighting, among other things, the client’s investment objectives, experience, financial situation, investment risk tolerance and any other information pertaining to client and/or to prospective investments.
Financial institutions and banks are classified according to several criteria such as: liquidity, solvency and credit level; accordingly, clients are expected to verify the financial strength of an investment institution before entrusting it with their funds, with a view to assess any potential risks.
Therefore, clients are responsible to determine their own risk appetite and tolerance and to decide how they wish to allocate their funds in light of their own financial expectations.
For more information, visit the Capital Markets Authority website: www.cma.gov.lb