Gulf International Bank launches $500m bond
Manama, December 5, 2012
Bahrain-based Gulf International Bank (GIB), which is majority owned by the Saudi Arabian government, said it has launched a $500 million five-year bond under its $4 billion Euro Medium Term Note Programme.
The notes were issued at a spread of dollar 5-year mid-swap plus 165 basis points with a coupon rate of 2.375 per cent, said a statement from GIB, which has been rated A by Fitch ratinsg agency/A3 by Moody's and BBB+ by S&P.
This highly successful Reg S transaction achieved one of the lowest coupons for a dollar 5-year senior unsecured transaction by a bank in the Mena region, clearly reflecting investors’ high confidence in GIB’s financial strength and credit story, it stated.
Initial price guidance was communicated at 8am London time yesterday (December 4) to the market at a range of mid-swap +165-175 basis points, which resulted in strong momentum allowing GIB to execute intra-day and to price at the low end of the price guidance, the Bahrain-based bank said.
The order book was 3.5 times oversubscribed and comprised around 90 investors, it added.
The success of GIB’s transaction was underpinned by the international marketing strategy undertaken in the Middle East, Asia and Europe, with two teams headed by GIB’s senior management covering all regions in a short timeframe.
The government of Saudi Arabia’s 97.2 per cent shareholding in GIB appealed to a diverse and high-quality investor base.-TradeArabia News Service
Commenting on the success, CEO Dr Yahya Alyahya said, "We are very pleased with the successful closing of this bond issue at a highly attractive pricing despite the volatile market backdrop. The demand from a large number of highly respected institutions reflects the market’s confidence in GIB’s strong financial position."
“This bond issue confirms GIB’s commitment to diversify its funding sources and utilise innovative funding structures to achieve the lowest possible cost of funding for the Bank,” he added.
The joint bookrunners for the offering were Barclays, GIB Capital, JP Morgan, National Bank of Abu Dhabi, Société Générale CIB and Standard Chartered Bank.-TradeArabia News Service