Bahrain-based Gulf International Bank (GIB) has announced the successful completion of a senior unsecured two billion Saudi riyal ($533 million) five-year floating rate notes issuance.

The notes were issued at a spread of 72.5 basis points above three-month Saudi Arabia Interbank Offered Rate (SAIBOR).

GIB said the transaction achieved a highly optimal spread, clearly reflecting investors confidence in its financial strength and credit story.

Initial price guidance was communicated on April 17 which resulted in strong momentum allowing GIB to execute a tight spread of 72.5 basis points above three-month SAIBOR.

The order book was more than 1.7 times oversubscribed, reaching more than 3.4bn riyals from investors, including banks, non-bank financial institutions, corporates, government agencies and investment companies within Saudi Arabia.

"We are very pleased with the successful closing of this bond issue at a very attractive pricing," GIB chief executive Dr Yahya Alyahya said.

"The demand from a large number of highly respected entities reflects market 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," he added.

The joint lead managers and book runners for the offering were GIB Capital, NCB Capital Company, Samba Capital and Investment Management Company and Saudi Fransi Capital.

The primary shareholder in GIB is the Public Investment Fund of Saudi Arabia.-Reuters